SÃO PAULO – As Brazil is gripped by the toxic mix of an acute political crisis, economic collapse, an environmental crisis in the Amazon and the worst public health emergency in a century, few are paying attention to a topic that is set to have a profound and long-term impact on the country’s geopolitical role in the 21st century: Its decision of who will build its 5G telecommunications network, pitting China’s Huawei against its American-backed rivals, led by Sweden’s Ericsson and Finland’s Nokia.
For the uninitiated: Over the next decades, a significant part of the global economy will be intimately tied to new technologies — ranging from autonomous cars and drones used for transport and warfare, to communication and global finance — and all of them will be subject to the new geopolitical logic of the emerging tech war between Washington and Beijing. Whoever sets the global standard and controls these new technologies is expected to have a massive strategic advantage in global affairs over the next decades. 5G technology, in short, has become a proxy for 21st global leadership, and countries around the world are debating how to position themselves. The choice is all the more important because the 5G may lead to the rise of two separate and potentially incompatible “technological spheres of influence”, which may make maintaining strong ties to both China and the United States more difficult.
Brazil is no exception, but the combination of being one of the 5G-contest main prizes — as the world’s sixth most populous country — and being economically vulnerable and diplomatically isolated makes the decision all the more relevant for its future. Over the past year, both Washington and Beijing have started to increase pressure on the Bolsonaro government vis-à-vis 5G. Recently, U.S. ambassador Todd Chapman said the United States was ready to provide financial support, via the International Development Finance Corporation, a development bank launched in 2018 to counter China’s financial power, if Brazil picked a non-Chinese company. The Brazilian president is probably the country’s most pro-American leader in history and is personally inclined to shun Huawei. His anti-Chinese stance is shared by his politically powerful son Eduardo, Foreign Minister Ernesto Araújo and by his National Security Advisor, General Augusto Heleno. In a recent announcement, Bolsonaro said he would take concerns about “sovereignty, data security and foreign policy” into consideration when making the decision, which was widely thought to be a sign that he was largely aligned with the United States on the matter.
Yet the government also knows full well that Brazil’s economy is deeply dependent on China. Despite the president’s attempts to forge a strategic alliance with Trump — which has produced mixed results — Brazil’s dependence on the Asian giant has only grown during his presidency, a trend that is set to continue. About a third of Brazil’s exports go to China, more than twice the amount of products headed to the United States.
China’s diplomats have largely acted behind the scenes, but it is no secret that not choosing Huawei — which is particularly attractive to developing countries because it is cheaper than its competitors — would be seen as a hostile act by Beijing. Aware that Chinese loans, investments and purchases of Brazilian goods will be crucial to help Brazil overcome what increasingly looks like its worst economic crisis in history, key decision-makers, ranging from Vice President Hamilton Mourão and Minister of Agriculture Tereza Cristina to Minister of Science and Technology Marcos Pontes and House president Rodrigo Maia, have spoken out against banning Huawei. The CEOs of Brazil’s largest telecommunication providers, such as Vivo, have also defended Huawei, which has operated in Brazil for more than two decades, provides lots of equipment for the country’s 3G and 4G networks, and promised to make a massive $800 million investment to build another assembly plant in Brazil by 2022. Last week, Maia urged the government not to “politicize” the issue, warned against excluding Chinese companies from the bidding process and said that any delays would make Brazil less competitive, particularly now that the pandemic is likely to push parts of many activities, such as education, medicine and retail, into the online realm.
Maia also questioned U.S. ambassador Chapman’s attacks on China and pointed out that Brazilian telecommunication companies had been working with Huawei for years without any concern related to spying or sovereignty. The comments also reflect a broader truth that will complicate the United States’ plans to exclude the Chinese giant from the bidding process: Brazilians tend to be more concerned about U.S. meddling than Chinese interference, and U.S. warnings against the potential risk of Chinese spying is unlikely to be taken seriously considering the still fresh memories of revelations that the U.S. National Security Agency spied on resident Rousseff’s cell phone, as well as on Petrobras, a company which, despite corruption scandals, still evokes national pride.
Another complicating factor is an unpredictable presidential election in the United States in November. A Biden win would lead to an inevitable deterioration of the bilateral relationship and see the U.S. join several countries such as Germany and France that have been openly critical of Brazil’s environmental record. On the campaign trail, Biden has already spoken out against Bolsonaro’s authoritarian antics, yet at the same time, when it comes to the broader U.S. interest in limiting Chinese influence in Latin America, the result of the presidential elections is unlikely to change the essence of American strategy vis-à-vis the region.
Next month, Leonardo de Moraes, the head of Anatel, Brazil’s Telecommunications Agency, will present a report on the matter – which will inevitably upset one side in the debate. The natural temptation for Brazil in such a high-stakes scenario involving two superpowers is to kick the decision down the road, and further delays — or even the reversal of key decisions — must be expected. Initially scheduled to take place in March 2020, the long-awaited 5G auction was postponed to December before being postponed to 2021. Yet Rodrigo Maia is certainly right to point out that the longer Brazil dithers, the greater the risk of falling even further behind as global dynamics will increasingly be shaped by the battle for technological supremacy between China and the United States.
ABOUT THE AUTHOR
Oliver Stuenkel is a contributing columnist for Americas Quarterly and teaches International Relations at the Getulio Vargas Foundation in São Paulo. He is the author of The BRICS and the Future of Global Order (2015) and Post-Western World: How Emerging Powers Are Remaking Global Order (2016).
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Huawei or Not? Brazil Faces a Key Geopolitical Choice - Americas Quarterly
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