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Small expectations between two big countries during Brazil’s official trip

As official visits go, it has been an inauspicious scene-setting for next week’s trip of Brazilian President Dilma Rousseff to the United States and a Tuesday meeting with President Barack Obama.

First off, the trip is a re-do. Rousseff was supposed to be in Washington two years ago for a full-fledged, bells and whistles state visit. She abruptly cancelled after revelations that the National Security Agency had been tapping her phone. (The scandal was even more painful for the Boeing Company, which had been on the verge of winning a $4 billion contract to re-equip the Brazilian air force. The contract went to a Swedish company.)

In her country of 202 million people, Rousseff’s problems keep mounting. The national joke in Brazil is that her poll ratings (barely 10 percent) are one point ahead of the country’s inflation rate (8.4 percent). Brazil’s signature, state-dominated company, Petrobras, is engulfed in allegations that billions disappeared in kick backs to Rousseff’s Workers Party. Just last week, two of the country’s major industrialists were arrested. Neither Rousseff nor her highly popular predecessor and mentor Luiz Inacio Lula da Silva have been implicated so far, but the country is on edge against the possibility of the scandal spreading.

Across two administrations, the United States has courted Brazil as the western hemisphere member of the BRICS (Brazil, Russia, India, China, South Africa) which were assuming a larger role as producers and consumers in the global economy. Now, the BRICS seem to be running short of mortar. China’s growth has slowed, though still enviable by Western standards; Russia is mired in sanctions and lower oil prices; and India’s new President Narendra Modi is making slow progress on freeing that economy from bureaucratic sclerosis.

And Brazil’s economy, which just a few years ago looked to be a model for creating and spreading wealth, is tipping into recession and confronting a growing national debt. Rousseff narrowly won re-election last year, in part campaigning against her conservative opponent’s promises of austerity and debt reduction. She doubled the government deficit last year with new spending, but faced with threats from international credit agencies to lower Brazil’s rating, the president appointed a University of Chicago trained economist Joaquim Levy as finance minister to implement policies she had recently mocked.

Brazil’s infrastructure and public services continue to crumble, which set against costly new football stadiums, brought mass demonstrations last year on the eve of the World Cup. The national mood sunk even further when Brazil was humiliated by Germany in the semi-finals. Now, most dramatically in the financial capital of Sao Paulo and in a country home to 12 percent of all the world’s water, that vital commodity is being rationed among 20 million people after record drought.

Not surprisingly, a panel of Brazilian and U.S. analysts at the Wilson Center’s Brazil Institute expressed caution about any major breakthroughs during this low key official visit. The two countries historically have had a touchy relationship and that situation is barely changed from Rousseff’s first visit to Washington in 2012, as reported on the PBS NewsHour.

A fundamental gap remains, said Peter Hakim, president emeritus of the Inter-American Dialogue and co-sponsor of the panel. “The U.S. looks to Brazil as a regional partner. Brazil insists on being a global actor.”

Hakim called for modest and longer-term goals to be set at the meetings, for example expanding Brazil’s trade with the U.S. It is six times smaller than that of either China or Mexico. But Kellie Meiman Hock, a former U.S. trade official now with McClarty Associates, said Brazil is still following state-directed industrial policies in contrast to the Pacific nations of Latin America that are eagerly pursuing free trade deals across that ocean and with the U.S. including the Trans-Pacific Partnership.

But amid the gloomy statistics, and even as demonstrators hit the streets of Brazil’s cities calling for Rousseff’s impeachment, the panelists looked for positive indicators. For example, Rousseff’s post- Washington trip to Silicon Valley serves as a reminder that Brazil has been an innovator in Internet technology.

More important, Brazil Institute director and long-time journalist Paulo Sotero noted that Brazil’s modern democracy is barely 30 years old, after decades of military dictatorship. (Rousseff, a one time Marxist organizer, was jailed and reportedly tortured during the dictatorship.) The Petrobras investigations, Sotero said, demonstrate that the culture of impunity for top officials is ending amid a strengthened judiciary and a civil society that will no longer tolerate corruption and inflation.

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