When Brazilian president Jair Bolsonaro travelled to the United States in mid-March, he broke with the tradition of making neighboring Argentina the first international stop for a newly-elected Brazilian leader.
Some three weeks later, he was followed by Brazil’s vice-president Hamilton Mourão, a retired army general who travelled to Washington, DC for a range of meetings, including with his US counterpart Mike Pence.
Photo opportunities aside, talks between Brazil’s new government and the Trump administration have revolved around one regional theme: Venezuela. How can the two countries collaborate to solve the political and economic turmoil in Venezuela?
On the surface, it might appear that the issue could strengthen ties between the two countries. Both presidents have spoken harshly of the regime of Nicolás Maduro, and it is no secret that Donald Trump and Mr. Bolsonaro would like to see Mr. Maduro replaced by the opposition leader Juan Guaidó.
On a deeper level, however, the Venezuela issue might undo hopes for a closer relationship between Brazil and the United States. Whether or not Mr. Maduro survives as president of Venezuela, his country is hurtling towards an economic catastrophe. If Mr. Maduro is ousted, someone will have to assume responsibility for rescuing Venezuela and its people from humanitarian and economic crises.
No one knows for sure how much restoring Venezuela will cost. Some economists—notably Ricardo Hausmann, professor of economic development at Harvard University—have calculated that Venezuela would need at least $60 billion over a number of years.
The figures would balloon if support was extended to neighboring Colombia, which is being engulfed by a spillover migration crisis stemming from Venezuela.
Brazil’s mounting fiscal problems mean it would be unable to foot any of this bill—with or without the United States. Brazil’s budget deficit was more than 7 percent of GDP for 2018, according to the Brazilian Central Bank, and it has a rising debt ratio that, by my calculation, could reach 100 percent of GDP over the next two years.
For its part, the Trump administration has often opposed spending on foreign aid and has criticized the international institutions that may be needed to assist Venezuela. David Malpass, Mr. Trump’s pick to lead the World Bank, has been openly critical of multilateral lenders and opposed increasing the IMF’s permanent capital levels while working in the US Treasury, for instance.
But as with European countries such as Greece and Portugal, the IMF will probably need to help Venezuela’s economy. This might mean the United States would have to support steps it has so far rejected to give greater voting power to emerging markets at the IMF, which would include Brazil. This change in stance by the United States would strengthen the relationship between the two countries, and would be a victory for the Bolsonaro administration.
But even before a discussion over what comes after Mr. Maduro can begin, the two largest democracies in the Americas would need to agree on a strategy to achieve that end. John Bolton, US national security adviser, has not ruled out military intervention in Venezuela, while Brazilian foreign minister Ernesto Araújo has taken a tough stance against Mr. Maduro, much to the dismay of the vice-president Mr. Mourão, who has said that Brazil would maintain a non-interventionist stance.
In an interview with the Financial Times on March 13, shortly before Mr. Bolsonaro’s visit to the United States, Mr. Mourão spoke of establishing back-channel talks and negotiating Mr. Maduro’s exit. He emphasised that there was little that Brazil could do in terms of economic pressures or sanctions, instead saying that the Venezuelan army should work to put Mr. Maduro in a position where he would transition power to Mr. Guaidó.
Apart from recognising that outright intervention could lead to unpredictable scenarios in countries already affected by the Venezuelan crisis—including Colombia, Ecuador and Peru—Mr. Mourão’s approach is more pragmatic. It reflects the reality that military intervention would probably require substantial financial resources—something that Brazil can ill-afford.
For now, Brazil and the United States have maintained the optics of engagement and collaboration over Venezuela. That situation could change, however, if the US administration pressed forward with a more aggressive strategy and asked for Brazil’s support.
If that were to happen, Brazil and the United States could find themselves at odds. Mr. Mourão is likely to prevail in Brazil thanks to his deep knowledge of Venezuela (he was military attaché to the Brazilian embassy in the 2000s) and the fact he enjoys the support of the military. In this case, the much-hailed special relationship between Brazil and the United States would suddenly be nothing more than empty words once again.