The council will be discussed between Brazilian President Luiz Inacio “Lula” da Silva and Venezuelan President Hugo Chavez when the two meet March 26. The question remains however, does Brazil have enough clout in the aforementioned areas to influence other countries to join?
 
Brazil’s economy as a whole is booming -- not in the usual cyclical fashion of emerging markets, but in sustained growth. Unlike other countries that have enacted economic cures for the short term (such as Argentina), Brazil has kept tight a fiscal policy allowing for its growth to be sustained and stable. Brazil has kept interest rates high to curb inflation. Despite this, foreign investment increased nearly 84 percent in 2007. Domestic demand is growing substantially as well, which means Brazil isn’t solely dependent on exports. Despite Petrobras’ emergence as a resource powerhouse, Brazil’s future isn’t entirely set on commodity prices, as is the case in Venezuela. Also, Brazil’s budget isn’t financed in large part by oil revenue, such as in Mexico. Brazilian international reserves are at all-time highs, and the tight fiscal controls have given the country a fair amount of room to maneuver.
 
Brazil also maintains a resource advantage. Hydroelectric, nuclear and liquefied natural gas power are being developed to satisfy domestic demand in the hopes of reducing or eliminating any dependence Brazil might have on its neighbors. In addition, Brazil also is using Petrobras and its power investments to gain influence over its neighbors. For example, Petrobras continues to invest heavily in Bolivian natural gas. This gives Brazil priority in receiving Bolivia’s natural gas shipments. Since Bolivia acts as the primary supplier of natural gas to other regional powers such as Argentina and Chile, these investments are invaluable political leverage. Brazil uses the same tactic for hydroelectric power in Paraguay. Add all of this to Brazil’s large and growing oil/ethanol reserves, and you have an energy superpower well prepared for the future.
 
To back all of this up Brazil has the strongest military in South America, positioned in the region’s most strategic location. Brazil already maintains the largest air force and navy in the region. According to an October 2007 announcement, the government will increase defense spending by 50 percent for 2008. Most of that will be spent on updating equipment. Colombia has a well-trained infantry force focused on counternarcotics operations in addition to counterinsurgency-style equipment, much of which is maintained with U.S. aid. While Venezuela has been in talks with Russia to make large military purchases such as late-model SU-30 “Flanker” fighter jets and Kilo-class diesel electric submarines, no country comes close to the military might of Brazil.
 
Brazil’s greatest advantage may be geographic. Its main population centers are well protected. A buffer of dense but unpopulated Amazon separates it from its northern neighbors, while a river basin protects it from its main rival Argentina. Brazil also has poured investment into Paraguay, Uruguay and Bolivia, garnering enough influence to use them as buffers as well. But the country’s legal borders give it access to almost every country on the continent.
 
The proposal has its obstacles to overcome, however. There are strong nationalistic sentiments among the countries of Latin America. It may be more difficult to convince leaders that cooperation is necessary or even possible. Already Chavez and his cohorts have begun forming their own leftist alliance, and it may not be in their political interest to subject themselves to further political pressure within the framework of such a council.
 
Regardless of the obstacles, Brazil still needs the right political platform from which to act as the region’s undisputed leader. It tried before, such as when it lobbied for a permanent seat on the U.N. Security Council. But the proposed organization, if adopted, would do much more to unify the countries under Brazilian influence. The council would act together on peacekeeping missions, fight organized crime, conduct joint military exercises and develop a defense policy for the region as a whole. As the largest power in the region, Brazil can promote Latin American independence as its duty, a message that should resonate well with the politically left in Brazil and elsewhere.
 

Case Study S.America P.1: Overview.

Case Study S.America P.2: Economic Musings.

Case Study S.America P.3: The Road to Independence.

Case Study S.America P.4: Che and Castro.