U.S. economist predicts that credit and social investment will flow back to Brazil
By Daniela Chiaretti – Brasília – Valor International
“I think the world is ready to rally to the cause of a new Bioeconomy for the Amazon. I believe that investment and social funding will flow to Brazil.” The optimistic view of the Lula administration comes from the U.S. economist Jeffrey Sachs, one of the most respected names among scholars of geopolitics and the new global economy.
“There is plenty of money available for climate, biodiversity, and forest if the policies in Brazil are well designed,” said Mr. Sachs, who believes “Brazil will achieve a higher credit rating under President Lula.” Mr. Sachs even promises to lobby for Brazil with the credit rating agencies. He will say the country has many strengths such as a green economy, sustainable energy, food production, mining, and services, including scientific institutions and universities. “These all give Brazil strong growth prospects.”
A professor and director of the Center for Sustainable Development at Columbia University, the economist says that Brazil, by holding the G20 presidency in 2024 and perhaps hosting COP30 in 2025, could “help reform the global architecture – including finance and foreign policy – for the benefit of sustainable development.”
The riots of January 8 were “disturbing” but “will strengthen democracy by exposing the abuses of power and the rhetoric of demagogue politicians.” He believes that Brazil, with Lula — “a great peacemaker” — can work with others to “end the war in Ukraine through diplomacy rather than military escalation.”
In 2019, with scientist Carlos Nobre, he founded the Scientific Panel for the Amazon. The unprecedented initiative brought together 240 scientists from eight Amazon countries and produced the most comprehensive analysis of the region. “Now the panel will work with the governments of the region to help identify the best pathways to sustainable development of the Amazon region, including the end of deforestation, the restoration of millions of hectares of degraded land, and the promotion of the new bioeconomy.”
A former special adviser to the UN secretary-general, Mr. Sachs advocates a cooperative approach in South America. “The U.S. should end the boycott and sanctions against Venezuela, so that Latin America can reunite around the common objective of sustainable development,” he said.
“The global climate crisis will continue to worsen in the coming years, so much more policy action, investment in green energy, and climate financing are needed,” he warned.
Mr. Sachs came to Brazil for the inauguration of President Lula, whom he has known personally for years. For 11 days, he was in Brasília, Rio de Janeiro, Salvador, and Belém. In Brasília, he had several meetings — including with Education Minister Camilo Santana.
For the economist, educating everyone should be a central priority. “This is one of the points of the incredible inequality that exists in Brazil,” he said at an event in September in New York. Soon after returning from Brazil, he gave this interview, in writing, to Valor:
Valor: What did you think about this moment in Brazil? Will the invasion of Brazil’s halls of power jeopardize new investments?
Jeffrey Sachs: The events were disturbing, of course. We still need to understand its background, and any possible links to U.S. “advisers” as well. The nature of the event was, of course, very similar to what was conceived by Donald Trump on January 6, 2021. However, I think the events in Brazil will strengthen democracy by exposing the abuses of power and the rhetoric of demagogue politicians. I believe that President Lula will have a firm hand, and that Brazil’s political leaders will act to protect the institutions of Brazilian democracy.
Valor: How was your meeting with Finance Minister Fernando Haddad today?
Mr. Sachs: It was very exciting, as was the meeting with Education Minister Camilo Santana. It is clear that they aim to pursue a bold agenda for Brazil, which I wholeheartedly endorse. We have been meeting with leaders of BNDES [Brazilian Development Bank], several universities, state government officials, and civil society leaders.
Valor: Environment and Climate Change Minister Marina Silva will have many challenges. They are already starting. What do you think about Brazil’s moment in this field?
Mr. Sachs: The world is ready to rally to the cause of a new bioeconomy for the Amazon. I believe that investment and social funding will flow to Brazil. President Lula is very clear: deforestation must stop, and truly sustainable development must begin. Minister Silva is world-renowned and greatly respected for her environmental leadership, and throughout our trip this week in Rio, Bahia, and Pará, we heard great confidence in Minister Silva.
Valor: You are the founder of the panel on the Amazon, which launched an important report on the region with many scientists. How the panel can move forward?
Mr. Sachs: The panel brings together more than 200 leading scientists from the eight countries of the Amazon. Within a short period of time, these scientists produced a comprehensive history, analysis, and vision for the Amazon. Now the Science Panel will work with the governments of the region, and with subnational governments as well, to help identify the best pathways to sustainable development of the Amazon region, including the end of deforestation, the restoration of millions of hectares of degraded land, and the promotion of the new bioeconomy.
Valor: The challenge on the Amazon is to really give value and opportunities to people who live there. Do you have any concrete ideas?
Mr. Sachs: Most importantly, the people in the Amazon have many excellent ideas. There are many high-value products of the Amazon that could earn more income for the populations; many more opportunities for improved healthcare, education, and infrastructure; and many ways to promote the products of the Amazon for higher value in world markets. One of the exciting things that we saw this week was the extent of engagement of civil society, indigenous peoples, and university scientists alongside government officials and business entrepreneurs.
Valor: The climate issue is spreading over the Lula administration, as several ministries now have departments and structures on climate. Is this a good way for this subject to be a priority?
Mr. Sachs: The global climate crisis will continue to worsen in the coming years, so much more policy action, investment in green energy, and climate financing are needed. President Lula will play a huge role in accelerating global action. He is hugely respected throughout the world. His leadership will make a big difference.
Valor: How do you think the U.S. can help and improve the collaboration with Brazil?
Mr. Sachs: The U.S. should end the boycott and sanctions against Venezuela, so that Latin America can reunite around the common objective of sustainable development. The U.S. should support much larger funding from the Inter-American Development Bank and the Development Bank of Latin American (CAF). The U.S. should end the “war on drugs” that has militarized much of Latin America, and shift to a social approach to drug addiction.
Valor: How do you think Brazil can move as an environment and agriculture powerhouse?
Mr. Sachs: Brazil will hold the presidency of the G20 in 2024, and if possible, the chairmanship of the Climate Conference (COP 30) in 2025, though the latter is not yet set. As such, Brazil will be in a position to help reform the global architecture – including finance and foreign policy – for the benefit of sustainable development. President Lula is also a great peacemaker, so I believe that Brazil will work with other countries to end the war in Ukraine through diplomacy rather than military escalation. I am particularly happy that Brazil has joined India and Indonesia at the helm of the G20, as this can help lead to peace and also social justice through a reform of the global financial architecture.
Valor: Brazil needs money now more than ever, after four years of ruins. Do you think there is money to help biodiversity, forest, climate protection?
Mr. Sachs: Yes, there is plenty of money available for these needs if the policies in Brazil are well-designed. I believe that Brazil will achieve a higher credit rating under President Lula, and I hope and believe that that could come soon. I will certainly do my best to explain to the credit rating agencies that Brazil has great strengths as a green economy, in sustainable energy, food production, mining, and of course services, including world-class scientific institutions and universities. These all give Brazil strong growth prospects. I also expect a significant increase in funding to come from international institutions such as the multilateral development banks, including the New Development Bank of the BRICS countries.