Annotations for Countries: Portugal

Argentina, Guatemala, and Venezuela, all of which have territorial disputes with Britain or former British colonies, strongly opposed Britain's application for permanent observer status at the Organization of American States. Venezuela also raised the issue of colonialism, which was criticized by Brazil and Peru on the grounds that other colonial countries such as Portugal have been granted observer status as a matter of routine. They also pointed out that Britain gave regular technical assistance to the OAS.

Focusing next on one country where Secretary of State Rogers was welcome, namely Brazil, Opinião from Rio de Janeiro, and Marcha, the Uruguayan paper comment on the international implications of President Medici's recent visit to Portugal. 

Opinião reports that on his recent trip to Portugal, Brazil's President Medici was asked by Portuguese authorities for support of Portugal's colonial policy in Africa. Portugal, which is increasingly isolated within the United Nations because of this policy, is seeking diplomatic support and perhaps military aid, for its policy of maintaining colonies in Africa, despite world opinion and strong movements for national liberation in these colonies. 

The Portuguese press, pointed up a dilemma in Brazilian foreign policy. For over a decade, Brazil has been interested in extending its economic and diplomatic influence in Africa. Brazil's official position is that it will try to penetrate Africa on all fronts. However, as Marcha points out, there are only two doors to Africa, through the Portuguese colonies or by way of the independent nations of Black Africa. 

If the Brazilians support the Portuguese, they will have access to the markets of Angola and Mozambique and will win favor with the white supremacist government of South Africa. Yet if Brazil chooses to support Portugal, it will be siding with the colonial powers and will anger and alienate black independent African nations. As Senegal's representative to the United Nations expressed it, "Brazil must choose between justice and injustice, between supporting an Africa free of colonialism and supporting Portugal." 

Marcha concludes that the Brazilians will most probably support Portugal, because it wants to become a great power and sees more immediate advantage for itself in close ties with South Africa. Opinião is not so sure of this and sees Brazil's position as still neutral. However, Opinião concludes that Brazil will have to make a decision soon. This from Opinião of Rio de Janeiro and Marcha of Montevideo. 

Latin America reports on recent political and economic developments between Brazil and Africa. Brazil's booming economy is leading it to seek markets while supplies, and commodity agreements with certain African nations. While Brazilian diplomats are experiencing some success here, there are delicate political problems concerning Brazilian Portuguese ties. Portugal, the only remaining European power to hold outright colonies has been battling growing liberation movements in recent years.

Brazil, a former colony itself, won its independence peacefully in the 19th century, largely because of Napoleonic Wars racking the European continent. Now, Brazil seems to have eclipsed its mother country economically, but politically the two remain on the same level. Both countries are ruled by extremely repressive dictatorships.

Some members of the African Independence Movement fear actual military involvement by Brazil and Guinea-Bissau, the colony in which Portugal seems closest to military defeat. They report that Brazilian officers in Portuguese uniforms were detected in Guinea and Cabo Verde last November. Further evidence was provided by opposition groups in Portugal who reported on conversations between Brazilian officers and the Portuguese authorities in Lisbon. One concrete suggestion is believed to have been that Brazil and Portugal should establish a joint naval base in the Cabo Verde Islands. This from the British News Weekly, Latin America. 

African liberation struggles and the oil crisis will soon be felt in Latin America. And from Latin America, a British weekly journal, comes a report by an African diplomat who said that in deciding to mount a common front against Zionist expansions and colonial racism in Africa, the organization of Arab Unity has planted the basis for a nationalist movement for the colonial peoples, which will transcend the frontiers of Africa and the Middle East. 

The same diplomat said that the Arab states, which were not members of the OAU, had requested that Nigeria deal on its own account with the question of oil supplies to Brazil, since Brazil was outside the limits of the African continent. In the view of some African diplomats, Nigeria's position as a leader of the OAU and at the same time, the world's eighth-largest exporter of oil must inevitably lead it into conflict with the Brazilian government. 

Brazil is one of the largest importers of Nigerian oil and one of the biggest investors in the development of the Portuguese colonial territories in Angola and Mozambique. Last year, not only did Brazil negotiate still closer economic ties with Portugal, but the Bank of Brazil also opened branches in Portugal's African possessions. Some observers believe that Nigeria is now on the verge of giving an ultimatum to Brazil. Either Brazil openly proclaimed support for the national liberation movements in Africa, including the recognition of the Republic of Guinea-Bissau proclaimed on 24th of December. 

Or Brazil will be included in the oil embargo against Portugal and the other colonialist countries. The Brazilian foreign ministry has already indicated its concern at the decisions taken at the OAU meeting and their implications for Brazil. Last week, government sources in Brasilia warned of increases in the price of petroleum derivatives and Petrobras included increased the price of petrol by 10%. 

The result of an oil embargo for Brazil in the view of most observers could be to bring current development plans to a complete stop. Although a large part of Brazil's energy demands are met by hydroelectric power, it has no other effective energy sources. Its coal reserves are comparatively small and of poor quality. While the development of a nuclear energy is still in its infancy. With the switch away from prospecting for local oil reserves to dependence on foreign supplies, Brazil appears to have placed itself in a highly vulnerable position. 

The whole of the current development program is to a greater or lesser extent dependent upon petroleum, and the loss of Nigerian oil could not be easily made up from other sources. If Nigeria does give Brazil an ultimatum, the Brazilians might find themselves having to consider reversing their well-established policy of support for Portugal. In view of the blood ties that exist between the two countries, the implications of such a decision could be profound and cause even more dissatisfaction within Brazil. 

Excelsior, one of Mexico City's leading dailies, reports that the United Nations General Assembly, by a huge majority December 14th, approved a committee report declaring Puerto Rico was in fact a colony of the United States, not an independent country. The vote was 104 to five, with 19 abstentions. The opposing votes were cast by the United States, Britain, France, Portugal, and South Africa. The vote showed that the great majority of the world's countries were not persuaded by US propaganda that Puerto Rico is a free-associated state, an independent country whose people voluntarily choose to live under US hegemony. 

Ricardo Alarcón, Cuban ambassador to the United Nations, played a leading role in support of the resolution during the more than three months of diplomatic struggle within the world body prior to the final vote. Juan Marie Bras, head of the Puerto Rican Socialist Party, and Rubén Berrios of the Puerto Rican Independence Party spoke to the United Nations Committee on decolonization in late August. The US and its few allies on this question bitterly opposed the campaign at every step. At the last minute, the US succeeded in delaying the general assemblies vote by a few days. But the defeat, when it came, was overwhelming. The vote marks an epic in the struggle by Puerto Rican independence forces for international recognition. 

It signifies that in the view of the world body, Puerto Rico is similar to Angola, Mozambique, and other territories directly ruled and occupied by a foreign power. This according to United Nation principles means the people of the island nation have the same legitimate right to rise up against their foreign rulers, as do the people in Portuguese-occupied Africa and other colonial territories. During the debate, speakers exposed to the whole range of United States domination and exploitation of the island, including manipulation and financing of political parties and governments, military occupation of huge bases, repression of patriots, brutal treatment of prisoners, and wholesale economic pillage by United States Corporation. This story from Excelsior of Mexico City. 

Our feature this week is the first half of an article on the controversial Brazilian model of economic development written by the United Presbyterian Church and reprinted in the Mexican daily El Dia. 

Most Americans don't know it, but the land of Carmen Miranda and the bossa nova has become the industrial giant of the Southern Hemisphere. Derided only a few short years ago as the perpetual land of the future, Brazilians now proclaim loudly that the future has arrived. "Underdeveloped hell", read the slogan at one of Sao Paulo's recent auto shows. The talk now is of an economic miracle to rival the recovery of West Germany after World War II. 

One wonders what this economic boom means for the majority of the Brazilian population. Brazil's resources may be extensive, but the majority of its people have always been poor, and their suffering great. Brazil's Indian population was nearly wiped out by the Portuguese colonists in the 16th and 17th centuries. Black slavery was introduced early into Brazil and was practiced widely until 1888. Historically, most Brazilians, slave or free, have been dependent and poor. Even those who own land, supervise plantations, and led expeditions were poor by today's standards. Very few had much in the way of comforts and goods. For most of its history, Brazil was a colony. It was governed by Portugal and existed to make money for the Portuguese. No matter that Indians were exterminated and African slaves went to early graves. 

One must not forget that most of Brazil's population is racially mixed, according to El Dia, that much of it is Black, and that its history of subjugation and misery continues to this day. 

There exists in Brazil one of the deepest cleavages between rich and poor, economically, culturally, and racially, to be found anywhere in the world. A few facts may help sketch the current scene. Here are Brazil's income distribution figures for 1968. The richest 1% of the population received an annual per capita income of $6,500. The middle 40% income group received $350 in 1968, and the poorest 50% of the population earned an average income of $120 in that year. What this says is that one half of Brazil's population in the middle of the 1960s had an average cash income of 35 cents a day. Most people, in other words, live outside the money economy. A cultural and economic middle class does exist in Brazil. It is the small, relatively privileged top 10% of the population. A tiny part of this group is wealthy, but most of it is composed of business and professional people, army officers and government officials, and corresponds to the salaried urban middle class in the United States. 

"But what do you do about poverty?", asks El Dia. A decade ago, Brazilian leaders and their North American allies embarked on an alliance for progress, a program which had its roots in Kubitschek's Operation Pan America. Kubitschek was president of Brazil from 1956 to 1961. His idea was to improve the lives of all Latin Americans by laying out an elaborate and massive program of economic development. He would stimulate this development with huge inputs of foreign capital, principally from the United States and Western Europe. Factories would be built in Latin America to produce the things people needed, provide them with jobs and wages, and yield tax revenues for their schools and cities. Foreign investors would become catalysts in the process of developing the natural and human resources of Latin America and partners in the creation of new and greater wealth for everyone. 

The key to the process of industrialization in Brazil was to be a program of import substitution. The idea was for Brazil to limit the importation of manufactured goods and build domestic industry behind high tariffs. Thus, Brazil would exploit her own internal market. Brazilian industries would be created to supply a domestic market, formerly undeveloped or in the hands of foreign companies. Once these companies were on their feet, the tariff walls would be lowered, forcing Brazilian industry to become more efficient and competitive. Finally, these industries would operate without protection and in competition on the world market. Brazil would then begin to export manufactured goods, improve her balance of trade and be on her way. 

A glance at Brazil's economic history is instructive. El Dia explains that traditionally, the Brazilian economy was based on agriculture and the export of agricultural commodities and minerals, coffee, cocoa, sugar, cotton, iron ore and gems. Rubber and gold were of great importance at one time. But countries whose economies are based on the export of primary products play a losing game. They are subject to the fluctuations of the world market and the increasing competition of other primary producers. Brazil's economic history is characterized by a succession of cycles of its major export commodities. From the early 16th century on, this was in turn the story of dye, wood, sugar, gold and coffee. The latter, of course, is still Brazil's major export commodity, although its strength has fluctuated substantially with changes in world demand. 

Against this discouraging history, the process of industrialization began, but it was a late beginning. Until 1822, Brazil was a Portuguese colony administered along strict mercantilist lines. That is, no industry was allowed to develop. It was not until the First World War that the beginnings of industrialization were much felt. The impetus towards industrialization came from the impact of the two World Wars, largely because of the interruption of supplies from overseas and the elimination of foreign competition. It was during this period that Brazil's import substitution policies began. 

Kubitschek was undoubtedly one of Brazil's most enthusiastic developmentalists. When he was inaugurated in 1956, he immediately set up a national development council, formulated a program of targets, and called for 50 years of development in five. His most spectacular project was the building of Brasilia, the country's modernistic capital, 600 miles into the interior. Brazil's automobile industry began under Kubitschek. Steel and cement production doubled and power generation tripled. 

After Kubitschek, however, the country experienced a period of political instability. Jânio Quadros resigned shortly after taking office, and the administration of was marked by a period of runaway inflation. By 1963, prices were going up by 71% a year. In 1963, the gross national product increased only 1.6%, while population growth exceeded 3%, thus producing a negative growth in per capita income. 

Brazil's relations with foreign investors and the United States government suffered during this time. Popular movements were gaining force and demanding redress of the country's longstanding inequities. Social unrest was widespread and growing. United States economic aid and corporate investments dropped sharply. Then in March 1964, the Brazilian army staged a coup d'etat and the United States recognized the provisional military government within 24 hours. United States economic aid was then restored at higher levels than ever before, and US technicians and advisors began to enter the country in unprecedented numbers.

The Brazilian military, under Castelo Branco, crushed the protest movements, jailed their leaders and deprived civilian political leaders of political rights for 10 years. Under the leadership of Brazil's new Harvard-trained Minister of Planning, Roberto Campos, stringent measures were taken to stem inflation, and tax concessions and investment guarantees were set up to lure back foreign capital.

The economic picture began to change. In 1965, the Brazilian economy, principally the industrial sector, grew at a rate of 3.9%. In 1966, the rate was 4.3%. In 1967, it was 5%, and in 1968, it was 6.3%. Since 1968, the GNP has increased by no less than 9% a year to a record high of 11% in 1972. This is what Brazilians call their economic miracle, and it is indeed a formidable achievement. The evidence is everywhere. One may raise questions about the way Brazil is growing and about who is benefiting from this growth and who is not, but the growth is very real. 

According to El Dia, in 1968 the US Information Agency in Rio released a somewhat whimsical TV spot announcement, extolling the success of Brazil's industrial development. It showed a scantily clad and shapely model operating a massive drill press to the sensuous beat of the samba and asked, "Is this development or isn't it?" 

For many Brazilians, the answer was, "Maybe not." They had basic questions to ask about what was happening to their country, and they were not matters about which to be whimsical. The first question has to do with the theory of import substitution. On the surface, it looks like a good idea for Brazil to cut foreign imports and encourage the growth of domestic industry in a protected market. Why shouldn't Brazil supply its own consumer needs, reinvest its profits, and spread the wealth? Perhaps it should. The problem is the theory doesn't work that way.

It is not Brazilians, by and large who are manufacturing the import substitutes, but foreign companies incorporated under Brazilian law. No group of private investors in Brazil, for example, could possibly compete with Volkswagen, Ford, and General Motors in establishing an automotive industry. There are, of course, many successful Brazilian industrialists, but they compete at a great disadvantage against the corporate giants of the United States, Western Europe, and Japan.

An American professor in Brazil put it this way. "What was supposed to be a solution for Brazil has turned out to be a solution for us. It was supposed to be a gain for Brazil to have foreign companies come in and set up shop. What we are now discovering," the professor said, "is that these companies make far more money through direct investments in manufacturing and sales operations in Brazil than they were able to make previously by exporting these same products from home. Volkswagen and Ford no longer ship cars to Brazil from Bremerhaven and New York. They manufacture them in Sao Paulo. Why is this more profitable? Certain costs, of course, are lower, but the more compelling answer is that the Brazilian market can be more effectively penetrated when a company's entire manufacturing, sales and servicing operation is managed within the host country." 

John Powers, president of Charles Pfizer & Company Pharmaceuticals, put it this way, in a speech to the American Management Association. "It is simply not possible in this decade of the 20th century to establish a business effectively in most world markets, in most products, by exporting. Successful market penetration usually requires building warehouses, creating and training an organization. It requires local sales promotion and building plants or assembly lines to back up the marketing effort. In short, it requires direct investment." 

It should not be surprising that some Brazilians are wondering who's helping whom. It is argued, of course, that even though foreign corporations take sizable profits out of Brazil, both in the form of repatriated profits and from cheaper production costs, Brazil benefits more than it loses. Certainly, some Brazilians gain from the salaries and wages paid to Brazilian managers and factory workers, from taxes paid to the state and from the availability of added goods and services. Whether the country gains more than it loses is another matter, and the answer depends on more than conventional economic considerations. 

You have been listening to the first part of a two-part feature on the Brazilian economic development model, written by the United Presbyterian Church and reprinted in the Mexican daily, El Dia. 

According to the British News weekly, Latin America, Brazil's growing interest in black Africa was clearly revealed by the visits earlier this year to that continent by the Brazilian foreign minister. In the view of most observers, this sudden interest had been forced upon Brazil by the urgent need for more markets for Brazil's manufactured products and a reasonably reliable and cheap source of raw materials for its industries. 

On the face of it, the more advanced countries of black Africa, such as Nigeria, offered ideal prospects, but these are marred by Brazil's extremely close ties with Portugal and its African territories of Angola, Mozambique and Guinea, and by a rapidly growing commercial relationship between Brazil and South Africa. 

In all its negotiations with Africa, Brazil has maintained an equally distant position between the interests of black Africa and of the colonial powers of Portugal and South Africa. The reason is not far to seek. Brazil's relationship with Portugal is long and very close, and the large Portuguese element in the Brazilian population is an ever present pressure group. More important, Portugal provides a gateway to Europe for Brazilian products by the back door and through its African colonies, a gateway to Africa. 

Although Brazil's relations with South Africa are a very recent origin, they have been strengthened fast. Trade between the two countries has passed the $90 million mark, which is more than Brazil's trade with all of the countries of black Africa combined. Direct air services between the two countries have recently been initiated and a firm invitation for South Africa to invest in Brazil was extended by Brazil's foreign minister at this year's session of the United Nations General Assembly. That report on British interests and black Africa from the British News Weekly, Latin America. 

The British weekly Latin America reports that the recent coup in Portugal has helped resolve some policy differences between Portugal and Brazil. Portugal and Brazil had previously split on the issue of African colonialism. Barely 24 hours after General António de Spínola's coup in Portugal, Brazil recognized the new Portuguese government. Brazil's quick recognition of General Spínola reflects her basic agreement with the new Portuguese colonial policy. Unlike his predecessor, Portugal's new leader seeks a political rather than a military solution to the wars in Portugal's African colonies. Brazil has urged such a political settlement on Portugal for some time. 

Latin America mentions two reasons for Brazil's advocacy of a peaceful solution in Africa. First, a mission of high-ranking Brazilian military officers visited the Portuguese colonies in Guinea-Bissau and Cape Verde towards the end of 1972. The Brazilian officers concluded that no military victory was possible for the Portuguese troops against the independence movements. The second reason Brazil supports a political solution in Africa stems from her need of African markets and natural resources.

When the oil crisis hit, the Brazilians became anxious to secure oil agreements with Nigeria and Libya. The Brazilians feared a possible African and Arabian oil boycott if Brazil continued to support Portugal's African colonial policy. To guarantee herself oil sources, Brazil repudiated African colonialism earlier this year. It could well be that Brazil's policy shift actually helped to precipitate the Portuguese political crisis. This from the British Weekly Latin America. 

The British weekly Latin America reports that the recent coup in Portugal has helped resolve some policy differences between Portugal and Brazil. Portugal and Brazil had previously split on the issue of African colonialism. Barely 24 hours after General António de Spínola's coup in Portugal, Brazil recognized the new Portuguese government. Brazil's quick recognition of General Spínola reflects her basic agreement with the new Portuguese colonial policy. Unlike his predecessor, Portugal's new leader seeks a political rather than a military solution to the wars in Portugal's African colonies. Brazil has urged such a political settlement on Portugal for some time. 

Latin America mentions two reasons for Brazil's advocacy of a peaceful solution in Africa. First, a mission of high-ranking Brazilian military officers visited the Portuguese colonies in Guinea-Bissau and Cape Verde towards the end of 1972. The Brazilian officers concluded that no military victory was possible for the Portuguese troops against the independence movements. The second reason Brazil supports a political solution in Africa stems from her need of African markets and natural resources.

When the oil crisis hit, the Brazilians became anxious to secure oil agreements with Nigeria and Libya. The Brazilians feared a possible African and Arabian oil boycott if Brazil continued to support Portugal's African colonial policy. To guarantee herself oil sources, Brazil repudiated African colonialism earlier this year. It could well be that Brazil's policy shift actually helped to precipitate the Portuguese political crisis. This from the British Weekly Latin America.