Brazil ‘provokes’ partners with new South-South fund
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Emerging Markets

Brazil ‘provokes’ partners with new South-South fund

The Brazilian government has agreed to establish a ground-breaking south-south co-operation fund with the African Development Bank

Brazil has signed a ground-breaking agreement with the African Development Bank to set up a South-South cooperation fund in a move it dubbed a “kind provocation” to its Latin American trading rivals.

Brazilian deputy planning minister Carlos Vidotto signed the agreement with Aloysius Ordu, vice president of the AfDB for country and regional programme policy.

Vidotto said Brazil would contribute $6 million to the fund within three years. He said it was an attempt to push through innovative models in triangular co-operation, such as knowledge sharing of biofuels technology with third parties.

The AfDB has already said that many African countries would have much to learn from Brazil’s successful experiments with social policies through cash transfers in recent years, which have allowed Brazil to curb poverty levels substantially.

A new stage of the Brazilian programme was launched last week by Lula’s successor, president Dilma Rousseff, in order to eradicate poverty in Brazil by 2015.

Brazil hopes that other countries from the Southern hemisphere, such as South Africa, India and Argentina, will also take part in the fund, while China has also been approached, the official said.

Meanwhile, AfDB expects to include the InterAmerican Development Bank (IDB), its Latin American counterpart, in the South-South cooperation agreement in order to strengthen ties between the two regions, and possibly share experience in political transition in countries that have just emerged from long period of authoritarian regimes, as was the case in Latin American in the 1980s.

Brazilian diplomats have been strengthening ties with Africa in recent years as part of Brazil’s push to gain the region leaders’ support in order to gain a permanent seat at the UN’s Security Council, as a result of its elusive reform.

In the meantime, Brazilian firms have also been eyeing the growing African market and “its growing middle class with money to spend, making it an increasingly attractive consumer market”, the bank said.

It comes as former Brazilian president Luiz Inacio da Lula, who spearheaded the breakthrough in ethanol fuel in his country, has said that he is eager to develop ties between Brazil and Africa through his own private foundation, currently called Instituto da Cidadania, or Citizenship institute, to be renamed Instituto Lula.

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