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Brazil is the economic powerhouse of South America and its global influence continues to grow. With a stable democratic government and one of the world's top ten economies, the country has more than half the land in South America and more than half of Latin America's GDP. Brazil is one of the three countries the Council is specifically focusing on at our annual conference, and we are very pleased to have Ambassador Abdenur as a pre-Asilomar preview to discuss the relations between our countries and where he sees Brazil going in the future. Ambassador Roberto Abdenur is a diplomat with along and rich career. Named Brazilian ambassador to the U.S. by President Lula in April 2004, Ambassador Abdenur first joined Brazil's foreign service in 1964 and has held several ambassadorial postings prior to his current commission. These past postings include serving as ambassador to Austria, Germany, China, and Ecuador. He had previously served as First Secretary at the Brazilian Embassy in Washington in the mid-1970s, as well as Deputy Consul General in the Brazilian Consulate General in London. In Brazil, Ambassador Abdenur served as Deputy Minister of External Relations and as the Minister's Chief of Economics and Trade. Ambassador Abdenur studied law at the Pontifical Catholic University of Rio de Janiero and economics at the London School of Economics. He speaks Portuguese, Spanish, English, French, and German; and is married with three children. Please join me in welcoming Ambassador Roberto Abdenur. Ladies and Gentlemen, let me tell you, I'm delighted to be here at the San Francisco chapter of this organization, I am becoming, in a way, a member of it, because I should tell you, just a few weeks ago, my wife and I had the honor of hosting a reception for a number, like 50 or 60, of the members of the Council from Paris and parts of the U.S. who attended the annual meeting in Washington, and just two days ago I addressed the Los Angeles chapter of the council. So it occurred to me that there should be some competition between the various chapters, and that I will judge according to the level of applause I receive at the end of this presentation. So I hope you win the competition even if I don't deserve it. It's a great pleasure being with you today, I would like to address two kinds of topics, on the one hand say, Brazil's current economic and political situation, and prospects for the future. And then I would like to make a few comments on, of course, a very important topic for both of us, yourselves and myself, which is Brazil-U.S. relations, important recent developments in our bilateral relations. Starting with Brazil's domestic situation, some of you might be familiar with developments in Brazil, and others perhaps not, so just let me tell you that we are now in the run-up to presidential elections, due in October. The current president, President Lula, has been in his job for about three and a half years now, and the point I want to make, well, let me just say, there was, over the past seven to eight months, a very serious political crisis in Brazil on account of revelations about very serious misdeeds in what has to do with political campaign financing. Many politicians were involved in this, some of them from the president's own party, the Workers' Party, and some even, some aides close to the president had to resign because of, say, accusations of their involvement, not totally proven, but anyhow, serious enough to justify their resignations. For a while, the president's popularity went down to about 35-40 percent. His party, of course, his party's image was damaged. Why? Because the Workers' Party had a tradition, it's a relatively new party, it's been in existence for two decades now, and the Workers' Party was very proud of abiding by higher moral standards, ethical standards than other more traditional parties in Brazil. So this scandal was a major blow to the party's image. There was a process of, how do you say, depuration, does one say that in English, no? The party is now in the hands of people who are not at all tainted by the scandal. The interesting thing, rather surprising to some observers and even some of us in Brazil is that President Lula not only managed to maintain a relatively high level of popularity throughout the crisis because... he was never really directly touched by those accusations, but now, in the past few weeks, the President's popularity has risen remarkably. On the other hand, the opposition, the major party from the opposition, the Social Democratic Party, which is the party to which the former president belonged, Fernando Henrique Cardozo, who ran Brazil for two consecutive four-year terms, and it's quite clear that the presidential election will be a face-off between President Lula, even though he has not officially declared himself a candidate, it's quite clear he will be presenting himself, he's already acting as a candidate and it's very, only too natural that he would do that, and on the other hand, someone from the Social Democratic Party. I was just reading in my awful BlackBerry the latest from Brazil and conversations are going on between two major politicians who are vying for the presidential candidacy: the governor of the state of Sao Paulo, Brazil's powerhouse, Geraldo Alckmin, and the mayor of the municipality of Sao Paulo, Jose Serra. Serra was Lula's opponent in the previous elections. He was defeated but he retains a very high level of name recognition, he is highly respected, so is Alckmin, so is Lula on the other hand. So this is going to be a very tough, very balanced dispute, impossible to foresee the results. But the point, the rather surprising thing, is that after many months of negative allegations accusations, suspicions involving the President's party, Lula is the man to beat. Lula is the man to beat. And so it will be a challenge for the opposition. Lula has been conducting the economy. Lula's government has been conducting the economy in a very successful way. Brazil is not growing at the incredibly fast rates of China, not even India right now. Why? Because Brazil has to overcome the legacy of decades of economic turbulence. The good thing is that we've begun doing this in previous governments, and the Lula government has deepened this commitment to pragmatic, serious, responsible economic policies. Inflation, which was the terrible, the terrible curse for us Brazilians over decades is now down to about five percent, next year it will be further, you know, further low, even lower, so we hope to achieve in two, three, four years' time inflation levels similar to those in the highly developed countries like the west of Europe, somewhere between two and three percent. But having inflation at five percent is already a major, major achievement for Brazil, and this means an improvement in the life of the people. Growth has been rather modest, the highest point two years ago was five percent, then the economy went down last year to 2.5 percent, then this year we expect growth of somewhere between 3-3.5 percent; not enough to solve Brazil's problems but quite enough to make the people comfortable. The government's strategy is repeatedly and emphatically reiterated by President Lula, his ministers, particularly the finance minister, who has been doing a very good job, and I tell you this also as a personal testimony, because I have been, on several occasions, by the President's side, or by the minister's side in major seminars or international meetings, and I heard them say that we do not want to engage in adventurous economic policy and then revert to the old pattern of short-lived booms followed by terrible crisis, high levels of inflation. We will slowly and gradually be generating, creating conditions for Brazil's economy to attain higher levels of growth until, say, we can be growing at somewhere between six and seven percent a year, without inflation, without detriment to the important conquests, important gains we have managed to accumulate over the past few years. So the economy is basically okay, with those qualifications. And on the other hand, the government has been very successful in implementing very active social programs. One of which, the most important of which, is called the Bolsa Familia, the family stipend. Like eight million families are benefiting, very poor people, miserable people, receive cash in amounts varying depending on the size of the family and their level of income, but with conditionalities, they have to keep the children at school, make sure that the whole family gets proper health care, and various other things. So this is not a populist, you know, handing out of cash, but a social program that is contributing to improving the quality of life and the level of education of our children, which is a major investment, of course. So the point I want to make is basically, is that this presidential election is going to be a very interesting dispute. But beyond that, what is important is that we are in a situation of unprecedented political and economic stability in Brazil. In the previous elections, the prospect of seeing Mr. Lula elected was rather frightening to many people inside and outside of Brazil because earlier on, Lula and his party were very critical of the previous government and sometimes defending positions which seemed to be very radical. But Lula was very wise, like seven or eight months before the elections, he came up with a written document called Carta O Pobrasiliero Lecture to the Brazilian People, in which he committed his government to the kind of serious economic policies that they came to put in practice in a very successful way. So now, you know, one of the things I do very frequently in my, as Ambassador to Washington, is to be in touch with major investors, trading partners, major companies, businessmen here and very much so the financial analysts in New York, those who are very much opinion-makers about Brazil. And I'm delighted to see now that, you know, there's absolutely no anxiety, no nervousness, no concern whatsoever about what will happen in Brazil following the election. So be it a second Lula government, be it a government run from the current opposition, whichever the results, Brazil's course is set, and Brazil is bound to continue on that. The agenda is clear: We need reforms. We need certain kinds of political reforms to reduce the number of political parties, which is too much, sixteen, it's very difficult to run a government when you have to try and consolidate a coalition involving so many political actors. We need tax reform to reduce the very high level of taxes, and taxes which are both economically counterproductive and socially unfair. We need social security reform to reduce the government's expenses, labor market reform, and so on, and so forth. This agenda is bound to be tackled in a very decisive way by whoever sits at the presidential palace in Brasilia starting the first of January next year. And that makes me very optimistic, not just me but many, say, many people in Brazil or abroad, that by the year 2020 will be there, will continue to rank in an ever-higher position in the concert of nations. It is already one of the major economies in the world, but when you look at that big economy growing at rates of five, six percent or even somewhat more, that means a very, very big market, a very big, a major player in the world economy. So I am glad to see that the World Affairs Council will be engaging various discussions involving the, the prospects for countries like China, India, Brazil, Russia, the so-called big emerging economies. So with those words, I would address now the issue of Brazil's foreign policies, especially from the viewpoint of our bilateral relations. There are many commonalities between Brazil and the U.S., we are both very big countries, we are big economies, and we are neighbors, we are neighbors. There is a bit of a distance, but we share the same hemisphere, the same, say, broader continent. That is an important element, because that means that on many issues pertaining to the hemisphere, we have to talk, on many issues we have converging interests and this is something that is quite clearly gaining momentum. There is an increasing amount of political convergence between our two countries these days on many issues of importance to the hemisphere. But Brazil and the U.S. are also big democracies, multi-ethnic democracies, they are very few multi-ethnic democracies in the world, really, big countries with large multi-ethnic democracies are, I think, of Brazil and the U.S. in the Americas, in a way, I think, South Africa in Africa, India of course, of course India, and not many others. So this is also something that brings us together, and you know, people sometimes look a little bit skeptically at the diplomatic discourse, which says a lot, or speaks a lot about values. And sometimes people say, "Well, values, those are just empty words, that's wind." It's not so. It's not so. And I'll give you a very interesting example. During President Bush's recent trip to Brazil in early November, you will be given an interesting selection of text emanating from that visit, you know, the two countries proclaim not just their common adherence to these values, but their decision to work together to promote those values throughout the world by contributing to stability, democracy, and development throughout the region, in Latin America, in South America, and beyond that, Brazil and the U.S. will be joining forces to work, to support, to help the very poor countries of Africa. Why? Because, again, this is an important point of convergence. Brazil and the U.S. are the two countries in the Americas with the biggest presence, with the strongest connection to Africa for all reasons, because we are what we are to a substantial extent thanks to the unfortunate fact of slavery, African slavery, brought into our countries during colonial times. So this is a very interesting example of Brazil and the U.S. working together to complete, to give complete expression to the common values they share. Now, let us look at the two countries and how they play, you know, how they act in the international arena, something that might perhaps be an interesting thought has occurred to me. The U.S. of course, is the hegemony, the hegemonic power these days. It was already even before the, you know, the meltdown of the Soviet Union. But now there's no other country in the world, no other bloc, no other bloc in the world, like the Soviet bloc that can somehow be a counter-point, counter-weight to the U.S. This means that the U.S. is, on many occasions, in such a strong position that it can set the agenda for the international debate, or set the agenda of the topics that are to be addressed in major international organizations, Starting with the U.N. as such, but moving forward to various U.N. agencies and many other fora. And that is a fact, that is a reality. Now what is Brazil's role? Of course, Brazil is certainly not as strong as the U.S., but Brazil is, I would say, almost, an almost indispensable partner in the definition of the terms under which this agenda will be tackled. You speak about U.N. reform, the Doha trade ground, financial issues, environmental issues, human rights issues, so on and so forth, and why? Because Brazil has, for decades, had a tradition of very active international engagement, very constructive international engagement, and Brazil has developed, in a way, a sort of unique capacity to be a bridge-maker, to act as a mediator between various segments of the international community, say, between north and south, developed and developing countries, between east and west, between the western world and the Islamic world on issues of human rights, or women's rights, or children's rights, on the issue of poverty, or hunger, or how to fight the HIV, the AIDS pandemic in our part of the world and elsewhere, so Brazil is also a powerful player internationally even though it does not have anything like the overall level of power the U.S. has. If you look at the two countries, one would say, is there a mis-match between the agendas, Brazil and the United States? Well, that might be in some cases, but basically what we see these days is the U.S. gives an overwhelming priority to the security aspects of the international agenda following the tragedy of 9/11. But the U.S. does not in any way put off thought, or downplay, the development agenda. For Brazil, the development agenda, this is a very broad concept, is of overriding importance, but neither do we ignore or downplay the security agenda. So, you know, there is a broad space for convergence between Brazil and the U.S. on both security-related issues, and that includes non-proliferation, the struggle against terrorism, drug trafficking, crime, and so on and so forth, and the development agenda. So much so, that you will see in the community, coming out from Bush's trip to Brazil that there is a lot of action there, a lot of commitment by the two countries to work together on the development aspects of the international agenda. So, what has been happening now is that the level of convergence between our two countries has been increasing significantly. And I think President Bush's trip and the statements issued on that occasion are very much an expression of that reality. I would allow myself to recommend to you after this meeting, perhaps if you have insomnia at night, try and read this small thing, they are very interesting. President Lula made a very interesting, very emphatic statement to the Brazilian and international press about Brazil's foreign policy in general, and Brazilian-U.S. relations in particular, President Bush replied to that in a very warm way, and the joint communiquÃƒÆ’Ã†â€™Ãƒâ€šÃ‚Â© they issued, I said, is really a very important document because it's not just diplomatic blah, blah, blah, it's a document that embodies important commitments and decisions with specific actions to be taken. Allow me to quote something President Lula said, which is very important, because just as there were doubts about Lula's economic policies when he was elected, there were also many people who thought that under Lula, relations with the U.S. would deteriorate. And now I quote what President Lula told, very emphatically, in the, you know, alongside President Bush, he said here, "When I was elected President, there were those who foresaw the deterioration of relations between Brazil and the U.S. They were," he says, "wrongly mistaken. On the contrary, our relations today are going through one of the best moments ever. Economic and trade relations have expanded greatly, and our political dialogue has gained a much higher quality." And he proceeds, on that line, and at the end, President Lula expresses his very special satisfaction at the fact that the United States is now conducting with Brazil a sort of exercise that the U.S. conducts with only a handful of countries in the world, and that is a strategic dialogue. And why? Because Brazil is a country with great strategic importance to many internationalists. Brazil is not strategic in the military sense of the word, and thank God, because we live in a region that is, perhaps, not totally stable in terms of domestic processes, but in a part of the world where the risk of conflict between any two countries is extremely low, if not nonexistent. But Brazil is of strategic importance when you talk about trade, the U.N., the environment, human rights, social issues, technology, whatever. And I'll give you a very interesting example of that. Just now, as we speak, President Lula spent the last three days on a state visit to Britain, and it was over yesterday. And today, our foreign minister, Celso Amorim, who is Brazil's major trade negotiator, stays behind in London because there will be a very important ministerial meeting involving the U.S., Rob Portman, Brazil, India, Japan, Australia and the European Union, and this meeting, which will go through today, hopefully might bring about important results in order to unblock the multilateral round of trade negotiations, this... And Brazil is now a pivotal player in that decisive process, so important for the world economy. And there's an interesting episode which is a very clear example of this special capacity. I refer to that Brazil has to mobilize segments of the international community, to bring countries together to overcome differences between various countries. Back in mid-2003 there was a meeting at the very beginning of the Doha round in Cancun, and it failed. And I remember I wasn't here yet, I was ambassador to Austria, and I remember the then-USTR, Bob Zoellick, who later became a very good friend of Brazil, but Bob Zoellick was very angry at the failure of that conference, and I remember a famous, or infamous article he wrote in the Financial Times on that occasion in which he singled out Brazil, he referred no less than five times to Brazil as being the culprit for the failure of the meeting because Brazil had brought together a group of developing countries which had very firmly insisted on the priority that the Doha round should give to agricultural issues, issues which have long been left behind in the process of trade liberalization. Well, just a couple of months ago, Celso Amorim, our minister, was in Washington for political consultations with the Secretary of State, and the following day there was an interesting working luncheon between him and Rob Portman at the USTR. I was there, on my minister's, to his side and I was delighted to see how smooth the understanding is between Brazil and the United States, we converge to many common approaches to the basic issues of the trade round. This is new, because in the past we were on opposing sides. And I was delighted to hear, you know, a positive assessment of the constructive role that the G-20, this coalition of developing countries has been playing in trying to contribute to the success of the Doha round. Why? Because by taking the initiative of inviting other developing countries to enter this group, Brazil is in many ways helping them, you know, put them on board of this effort towards trade liberalization. There are developing countries, like, say, India, which have a very defensive agenda, a very defensive attitude on certain issues, like agricultural trade. China, India, has an offensive agenda on surfaces: off-shoring, outsourcing, topics which are very current in the U.S. these days, but India has to be careful about how it opens its markets for agricultural products, because there are like, 650 million Indians who are very poor and who rely for their survival on subsistence agriculture. So the G-20 has turned out to be a very fortunate initiative, and is now recognized for that by the U.S. and other developed countries, because it has succeeded in bringing together developing countries with various diverse agendas, bringing them together into a unit that is working in a coordinated way in these negotiations. Whether or not the Doha round will fail or succeed, it's still an open question. But if it fails, I hope it won't, it will not have been for lack of effort by Brazil and the United States. Now the ball these days is very much on the European Union's court. And I was glad to see also that now, President Lula came up a few weeks ago with a very interesting idea, that is, if negotiations at ministerial level continue to move very slowly, or if they reach a deadlock, there might be a case for a top-level meeting by heads of government. And Prime Minister Blair has reacted positively to that idea, publicly now, together with President Lula. President Lula gave a phone call to President Bush about this a few weeks ago, and President Bush said something like, that, "Well, it's an interesting idea, let's look at it, you know, let's see how things develop." So, you know, there's a chance that the U.S. might agree to such a meeting. It's always, of course, a difficult enterprise to bring together a group of heads of government, to take a final decision. But Brazil is really now a very, a very positive factor in those negotiations. So let me just finalize by telling you that this convergence between our countries does not in any way does not imply the nonexistence of any areas of disagreement. There are many, many important topics of the international agenda on which Brazil and the U.S. do not see eye-to-eye, and on which, sometimes, we have very serious differences. You speak about Iraq; we opposed a unilateral invasion on Iraq without U.N. blessing. You speak about U.N. reforms, there are important areas of disagreement. You speak about the environment, there are important areas of disagreement. So there are many different approaches, but, you know, the good thing is that we, the two sides, have succeeded in keeping our differences circumscribed to the fora in which they are tackled without contaminating, without allowing them to contaminate in any way the very good atmosphere that has been prevailing in our bilateral relations. And the results are contained, the results of this successful effort by both sides are very emphatically expressed in this communiquÃƒÆ’Ã†â€™Ãƒâ€šÃ‚Â© and in the statements made on, during President Bush's trip to Brazil and I'm delighted to see that, at the very end of the communiquÃƒÆ’Ã†â€™Ãƒâ€šÃ‚Â© they take important decisions to deepen and broaden the dialogue and mechanisms for exchange and cooperation between Brazil and the U.S. in areas like energy, like agriculture, like health, science and technology, education, the environment, promotion of racial equality, you know, promotion of democracy in the world, and right now, my task as Brazil's ambassador is to make sure there will be prompt and effective implementation of those decisions so that whatever happens next year, with a new Brazilian government, be it a second Lula government, be it a government run by the current opposition, the basis for the relations between Brazil and the U.S. will be even sounder, even stronger, even more diversified. And that is something that is, of course, very gratifying to me, as Brazil's ambassador to Washington. It means my job is easier, but also it means I have a very heavy agenda to look after. But it's very gratifying to see this. This is not just a moment's gain in our relations; I think our relations have been elevated to a very higher level. The U.S. has officially said on many occasions that it welcomes Brazil's increasing role in the world, that this is good for the U.S. and for the world as the whole, and for the region, so, you know, we, our, our relations, I said that Brazil is on a sound track. Likewise, I think Brazil-U.S. relations are on a very sound and stable track and about to continue developing in that direction. So thank you very much, and I'll be delighted to take some questions.