Late last month, Brazilian president Luiz Inácio Lula da Silva held a summit for the leaders of twelve South American countries with the view of pushing regional integration. The meeting was well-attended with presidents from every country except Peru, whose leader was unable to attend for legal reasons pertaining to an investigation. While the effort to promote greater economic integration was generally appreciated, the Brazilian president’s warm embrace of Venezuela’s authoritarian President Nicolás Maduro one day before the summit set an ideological tone for the event. Indeed, Lula’s efforts to restart some type of South American unity left more questions than answers.

Changes in Brazilian Foreign Policy under Lula

Since his return to office in January 2023, Lula has shifted Brazil’s foreign policy from a generally pro-U.S. stance under right-wing President Jair Bolsonaro (2019–2022) to a return to nonalignment—broadly defined as a preference for a multipolar world—which allows Latin America’s largest country to pursue its own path, reduce the role of the United States (and the West), and work through global South organizations, such as the BRICS (Brazil, Russia, India, China, and South Africa). Another plank in this policy is for Brazil to lead in continental unity, which would give Latin America greater leverage in global affairs.

Lula’s nonaligned policy also means leaning toward Moscow in the Russo-Ukrainian War and maintaining close economic relations with China. The national interest dimension is evident in that Russia is important as it is a major supplier of fertilizer for Brazil’s agricultural exports, while China is the South American country’s primary export market and has invested $66 billion in its economy between 2007 and 2020, according to the Brazil-China Business Council. As Oliver Stuenkel, professor of international relations at the Getúlio Vargas Foundation in Sao Paulo observed: “Non-alignment is seen as a safe bet in a world where great power competition will increase. From the Brazilian point of view, the rise of China and re-emergence of Russia is not actually bad…that is why Brasilia has no interest in joining a western coalition against Russia.”

The Beijing and Moscow tilt is reflected in Lula sending a delegation to Chinese and Russian ally Venezuela in March, refusing to send weapons to Ukraine, and hosting Russia’s foreign minister Sergei Lavrov in April. In April, at the BRICS summit, the Brazilian leader also called upon BRICS to come up with an alternative to replace the U.S. dollar in foreign trade. In addition to these China and Russia-related developments, Brazil refused to sign a UN resolution condemning Nicaragua’s human rights abuses; Managua has devolved into a pro-Russia and Chinese leftist dictatorship. Brazil allowed Iranian warships to dock in Rio de Janeiro, despite pressure from Washington to bar them.

The Venezuela Factor

Considering the “nonaligned” stance of Brazil’s foreign policy, the May 2023 Brasilia summit sought to promote the creation of a regional trade currency to challenge the hegemony of the U.S. dollar and to pull Latin American countries closer together under the flag of the Union of South American Nations (UNASUR). The single currency would initially apply to the Mercosur trade bloc (composed of Argentina, Brazil, Paraguay, and Uruguay). In his opening address, the Brazilian president proposed to “strengthen the South American identity in monetary policy, through better compensation mechanisms and the creation of a shared unit of transaction for trading”, instead of being dependent on external currencies, in particular the U.S. dollar.

This idea has kicked around since the early 1990s, but has never gained much support and is likely to go anywhere. There are considerable differences in monetary policy across the region; it is questionable that South America’s major trade partners would be willing to trade in a Mercosur currency (like Argentina’s volatile peso), and any such development would require a broader regional economic foundation based on customs unions and a common market (as done in the European Union over several decades). No doubt the idea was greeted with polite applause, but in the aftermath of the summit there is no rush of willing participants.

What made a bigger splash at the summit was Lula’s embrace of Maduro. Thematically, the meeting of Lula and Maduro prior to the summit was meant to set the tone of conciliation and integration. Lula, however, was strident that the charges against Maduro of human and civil rights abuses were part of a political “narrative” by the West and he condemned U.S. sanctions on the Venezuelan government as “worse than war.” He also noted that it was “absurd” for some governments not to recognize Maduro as the duly elected leader.

The reaction to Lula’s “welcome back, Maduro” stance is seen in two ways. On the pragmatic side, warmer Brazilian-Venezuelan relations reflect the failure of the West’s efforts to dislodge Maduro, and, like it or not, the Venezuelan strongman is here to stay. In that respect, other Latin American leaders like Colombia’s Gustavo Petro and Mexico’s Andrés Manuel López Obrador recognize this and want to move on. Even the Biden administration has softened its stance on Venezuela (though with little to show for its efforts). Another point of consideration for Lula’s determination to mend relations with Venezuela, severed by his predecessor, right-wing Jair Bolsonaro (2019–2022) made it much more difficult to address issues related to a shared border, climate change, and the need to deal with Venezuelan refugees.

The other reaction is more negative and related to human rights. Lula worked with Maduro’s predecessor Hugo Chávez in the creation of UNASUR in 2008, which the Venezuelan leader started to counteract U.S. influence in South America. Perhaps some nostalgia for that era remains very much in Lula’s thinking on bringing Maduro in from the diplomatic cold and returning him to the international fold through a regional organization.

But the Brazilian leader’s intentional blind eye to the gross human rights abuses in Venezuela made some of the other South American leaders uncomfortable. While most made no comment, Chile’s center-left President Gabriel Boric stated, “We are glad that Venezuela is returning to multilateral bodies…This, however, cannot mean sweeping under the rug principles that are important to us. The human rights situation is not a narrative construction, it is a serious reality.” According to Uruguay’s center-right President Luis Lacalle Pou, “the worst thing we can do” is pretend there are no significant human rights problems in Venezuela.

Winners and Losers

Looking ahead, the biggest winner from Lula’s South American summit was Venezuela’s Maduro. The summit raised his profile and helped launder him as a national leader deserving of respect, despite his presiding over the largest migration crisis in the Western Hemisphere, the creation of a narco-state, and a disregard for democratic rule and human rights. Consequently, the summit was given an ideological stamp (a willingness to accept dictators), which is likely to complicate any future efforts for deeper economic integration, especially considering that elections could result in political shifts. Currently, South America is dominated by center-left governments, but that could change over the medium term. Argentina’s elections are scheduled for October this year.

While Lula got his summit, asserted Brazil’s growing importance as part of the Global South, and brought in a political pariah from the cold, little is likely to come from it in terms of concrete policies. If nothing else, it comes across as so much background noise from a region that cannot yet exert major leverage on global affairs. Lula and his cadre of foreign policy advisors are right that for Latin America to carry more weight in international affairs it needs greater unity. However, more summits like May’s are not going to do the trick, as ideological indulgences for dictators do not make for economic integration. The European Union was able to proceed on the path to economic integration, but has worked hard to keep its membership a democratic club, something Brazil’s president should have given greater thought to.

Dr. Scott B. MacDonald is the Chief Economist for Smith’s Research & Gradings, a Fellow with the Caribbean Policy Consortium, and a Research fellow with Global Americans. Prior to those positions, he worked for the Office of the Comptroller of the Currency, Credit Suisse, Donaldson, Lufkin and Jenrette, KWR International, and Mitsubishi Corporation. His most recent book is The New Cold War, China and the Caribbean (Palgrave Macmillan 2022).

Image: Unsplash.