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Multinacionais brasileiras: competências para a internacionalização by Afonso Fleury and Maria Tereza Leme Fleury BY SÉRGIO TEIXEIRA Brazil, the country of the future” was a sarcastic cliché popular among Brazilians to describe a country striving to reach an economic potential that always seemed just out of reach. The past decade, however, offered hope that Brazil was finally fulfilling the cliché’s promise. As hyperinflation became a distant memory, the hemisphere’s largest country joined Russia, India and China in the ranks of emerging economies. The story of the passage from cliché to reality is explored in Multinacionais brasileiras: competências para a internacionalização (Brazilian Multinationals: Competences for Internationalization), co-authored by Afonso Fleury, a professor in the department of production engineering at Universidade de São Paulo, and Maria Tereza Leme Fleury, director and professor at Escola de Administração de São Paulo da Fundação Getúlio Vargas. As the authors point out, Brazil’s success was accompanied by real income gains among a large percentage of Brazilians, which in turn fueled a consumption boom as Brazilian companies exploited a profitable new consumer market. But can the success story be sustained? The authors examine in particular the experience of Brazilian multinationals such as Vale (mining), Petrobras (oil) and Embraer (regional aircraft), who have all become top global performers. The book is especially useful as a primer for those who wish to understand the fundamental differences between the traditional business model of the multinationals of the past (think IBM or General Motors) and this new breed of global powerhouse. Part I of Multinacionais is devoted to creating an analytical framework for the authors’ research. Most academic readers will be familiar with the impact of globalization on emerging economies, but they will be well rewarded by the analysis offered in Part II, which provides case studies of successful Brazilian multinationals and compares them with the experiences of other BRICS countries (they append an “S” for South Africa). As Part II of Multinacionais details, Brazil relied on a strategy of self-sufficiency from the 1950s through the 1980s. Development was understood as import substitution, with domestic industries protected by trade barriers and government incentives. This policy changed drastically in the 1990s, when a period of privatization of large state assets brought a massive influx of foreign capital and the denationalization of many sectors. As the authors state, “one of the consequences [of adopting a neoliberal agenda] was the conscious decision to abandon industrial policies.” While some companies were acquired by their foreign rivals, others seized the opportunity of being free of state control to play catch-up to the world economy. According to the authors, these corporate leaders drew their inspiration from Japanese management theory and studied the multinational subsidiaries from the U.S. and Europe. JBS Friboi, the world’s largest protein producer, is a prime example. The company began as a butcher shop in the state of Goiás in 1953 with humble beginnings. After 10 years, entrepreneur José Batista Sobrinho entered the production side of the business with slaughterhouses. By the 1990s, the company had acquired its main Brazilian rivals. A decade later it acquired Swift Foods & Company and Inalca from the U.S. and Europe, respectively. There are other examples in the case studies of companies that propelled themselves to succeed abroad. Some are well-known, such as Petrobras and Embraer. Others, such as Marcopolo, which manufactures buses, and Griaule Biometrics, will be new to many readers. Yet the book could benefit from even deeper analysis. Most of the best-performing companies are arguably the ones in the primary sector, such as agriculture, mining and oil. Their global preeminence is due to their business acumen, but it is also due to the demand for grains, iron ore and protein from other developing countries, especially China. Some of the more hi-tech companies mentioned in the book do not come close to the international profile of a Vale or a JBS Friboi. And this is the quandary that the Brazilian government—and Brazilian companies—face today. When will Brazil have its own Lenovo, the Chinese company that acquired IBM’s PC division? What about its own Tata Group, India’s most internationalized conglomerate? Nevertheless, learning from the lessons of the past is vital, and they are laid out very clearly in this book. Multinacionais offers a better understanding of a new world in which the Ciscos will rub shoulders with the Huaweis, and where Embraer might become a name as well-known as Boeing. Back to top No Lost Causes by Álvaro Uribe Vélez BY MIGUEL SILVA During his eight years of government, former Colombian President Álvaro Uribe took micro-management to levels never seen before. “I've always believed in combining a macro vision with involvement in the small details of execution,” writes Uribe in his presidential memoir, No Lost Causes, written with the help of Brian Winter. “In retrospect, when I look at our government, I would say that whenever anything went wrong, it was because we weren't looking after the details.” The truth of this self-description is demonstrated graphically in the former president’s book, which places him at the center of the action—often in macho, solipsistic overtones—as he seeks to reverse Colombia’s downward spiral of violence and does battle with the country’s inept and weak state. The book manages to answer many of the questions that have swirled around the controversial and often autocratic former president. But in remaining so faithful to Uribe’s personal vision and voice, it does a disservice not only to the genuine successes of his administration, but also to the country’s complex and vibrant institutional democracy. Uribe would call middle and lower level public officials to ask them about public works, the status of a decision, or even the weather in an area where military operations were taking place. He would work every day (trabajar, trabajar y trabajar was one of his slogans); he would walk towns, cities and rural areas two or three times a week; and he became the self-appointed public ombudsman defending citizens against official negligence. Actually, rather than act as the representative of the state he governed, he seemed more comfortable channeling citizen anger against a weak public administration—publicly lambasting ministers, generals, governors, and mayors for falling short in their duties. People loved the show. It was, obviously, televised. It ran for hours and hours, every Saturday, for eight years. Uribe chronicles his life story, beginning with his early days as the son of a strong father, an imperial pater familias, and ending with his post-presidential career, where he has become a restless and active Tweeter (20 to 30 times a day), insulting his political enemies (and making new ones) or criticizing the current government. As he informs us, he “worries” for the future of Colombia. The reader, however, is left trapped in a version of The World According to Garp. The self-promoting list of heroic acts, religious insights, puritan values, and no real humans in his lonely planet makes this book an effort to get through. A foreigner reading it will immediately think of Colombia (a country as big as Spain, France and Portugal together, and today Latin America's third largest economy after Brazil and Mexico) as a banana republic where nothing happens if the president does not make it happen. Yet, if it were not thanks to Colombia’s strong institutions, Uribe would still be president. It was the country’s robust media that started to question an all too powerful president right after he was reelected; it was an independent Supreme Court that initiated investigations against congressmen associated with the government and linked to paramilitary activities; and it was the powerful higher courts that counterattacked a government that started to spy on them. In short, Colombia was no one-man state. Moreover, the book lacks a sense of humor or literary style of any kind. That said, some of the presidential anecdotes are interesting, particularly those related to military operations against the FARC. For example, reading about the liberation of Ingrid Betancourt, who was kidnapped by the FARC guerrillas during the 2002 presidential election, makes up for the many pages dedicated only to Uribe. The assassination of former minister Gilberto Echeverry—my colleague in the administration of President César Gaviria—a wonderful man and the governor of Antioquia, is also a great read (and is what starts the book). Unlike the memoirs of former U.S. presidents, who are often concerned with defending their historical legacy, Uribe's autobiography is permeated by the self-serving tone of a permanent candidate for office. It is not candid, but contained—to a point of being obsessive. It revolves around one person—Uribe—and the abandoned planet he describes has no real characters. He offers no tribute to his team, and narrates events as moments in which he was critical in the way things moved, one way or another. Uribe uses his book to set the record straight on a number of issues that haunted him during his tenure. He explains why his father’s name, Alberto Uribe Sierra, appears related to Pablo Escobar, the drug lord, and why his adversaries are wrong to say they were close. The relationship was in fact marginal—more a function of the business connections among horse dealers in the same city than a questionable tie that influenced presidential policy. He also deals with his suggestion that the civilian vigilante groups that were created when he was governor of Antioquia (not by him) should use assault rifles, and how that mistake created the myth that he formed what later became paramilitary terror squads. More complicated still was his relationship with paramilitaries, which his critics have suggested was overly warm—and which Uribe denies. The relationship was principally based on a mutual loathing of the communist groups fighting to bring down the state—and the eventual support from the paramilitaries was not the consequence of a quid pro quo. He also discusses the incentives his government offered to the military for bringing in “corpses” of guerrillas, which led to the scandal of the “false positives” (more than 1,000 deaths of so-called guerrillas who later turned out to be innocent young men)—which he says was not the intent. The reality, though, is that such atrocities were the unfortunate consequence of his “reward” policies, rather than a deliberate policy objective. Uribe considers himself a “survivor.” That was the word he used in a recent Univisión interview in the United States about his book. He sees himself as a heroic avenger of the type played by Mel Gibson, one who is always facing real fire from enemies. He proudly mentions his own penchant for weaponry in the book, noting casually at one point, “on my way out I grabbed a weapon to protect myself.” He consistently hammers home his role—to paraphrase one recent U.S. president—as the ultimate Decider who needed to give his personal green light to decisions and operations. He states it was his personal responsibility (an expression found over 10 times throughout the book, underlining his almost pathological need for personal involvement and later crucifixion)—as if that were not the case for any president in such circumstances. Uribe put his nation on the road to domestic peace, and his fellow citizens feel real gratitude for his achievement. But his memoir fails to provide a candid view of his life and his government. The ex-president seems to have decided to write an ode to himself, one that can be used by his close followers—those who are determined to get him reelected to a third term. This, I must say, describes Uribe quite well, in a sense, as a politician so eager to get back into the game that he will gamble even his own, very valuable, historic significance, to get back to the daily exercise of power. Back to top U.S.-Venezuela Relations Since the 1990s: Coping with Midlevel Security Threats by Javier Corrales and Carlos A. Romero BY JUAN NAGEL Diplomacy,” Winston Churchill once said, “is the art of telling people to go to hell in such a way that they ask for directions.” Judging by this definition, Venezuelan President Hugo Chávez is not a natural diplomat. His foreign policy is blunt and acerbic: if he dislikes you, he tells you plain and simple, frequently in public. Chávez’ “diplomacy” toward the U.S., his nemesis and—paradoxically—main trading partner, is a toxic mix of rhetoric with occasional pragmatism. This poses a complicated challenge for U.S. diplomats. What are the forces driving the evolution of recent relations between the two countries? Can we analyze them using established theories of international relations (IR)? These questions are addressed in U.S.–Venezuela Relations Since the 1990s: Coping with Midlevel Security Threats, a new book by political scientists Javier Corrales and Carlos A. Romero. Corrales and Romero, professors, respectively, at Amherst College and the Universidad Central de Venezuela, conclude that only a combination of IR theories can explain this relationship. Their comprehensive analysis of the facts and factors that drive it should interest students of Venezuela, as well as those specializing in international relations. The book begins by correctly observing that U.S policy toward Venezuela after Chávez was inaugurated in 1999 and was open-minded—not friendly, but not yet fully hostile. This changed in the first five years of George W. Bush’s presidency. Two events in 2001 precipitated a heightening of tensions: the increase in internal opposition to Chávez, and Venezuela’s condemnation of the U.S. war in Afghanistan. Washington reacted sharply to the latter by withdrawing its ambassador and publicly criticizing Chávez in an effort to rally support in the hemisphere against him, buoyed by a perception that Chávez was internally weak. The policy of direct confrontation was unproductive for the U.S., so a more moderate approach was instituted with the appointment of Thomas Shannon to the State Department’s Western Hemisphere Affairs post. Shannon initiated a “talk softly, sanction softly” policy, which meant maintaining trade ties, ignoring the many outrageous declarations coming from Caracas, and targeting specific individuals and institutions inside the Chávez government with midlevel sanctions. “At the core of Shannon’s doctrine,” the authors point out, “was a fusion of commercial liberalism and prudent realism.” This shift in policy sparks the authors’ academic curiosity. The U.S. is more important to Venezuela than vice versa, so one would expect the relationship to evolve toward a toughening stance from Washington and a more conciliatory approach from Caracas. Yet with the Shannon doctrine, the opposite has occurred. They wonder, can existing IR theories explain this counter-intuitive development? To answer the question, the authors employ several strands of IR thinking. They first cite structural realism, which broadly posits that when two nations feel threatened by each other, conflict ensues. Under this theory, economic interdependence serves to constrain this tendency, effectively putting the brakes on harsh measures. The authors believe structural realism on its own does not fully explain the incensed rhetoric. They argue that constructivism—which grounds international relations in ideological concerns—can assist in accounting for Venezuela’s sustained anti-American stance. They then posit a theory of “identity construction” to explain Chávez’ relations with “pariah” states such as Iran and Cuba as “a way of signaling the formation of an ideological divide between us and the others.” The Venezuelan leadership’s effort to court nations hostile to American interests is seen as an essential element in defining its national identity. The authors masterfully analyze the domestic factors shaping each country’s decisions. Recognizing Venezuelans’ generally positive sentiment toward the U.S., they write that “[w]ithout the rise of semi authoritarianism […] it would have been harder for Chávez to introduce this type of foreign policy break from both historical tradition and majority sentiment.” Chávez, they believe, is implementing his U.S. policy in spite of domestic factors, not because of them. On the U.S. side, the authors focus on the role of the U.S. Congress in determining foreign policy. In the beginning of the decade, Congress was tolerant toward Chávez. Yet, as Chávez’ assertiveness grew and his relations with nations such as Iran deepened, positions in Congress hardened while the administration—conversely—began implementing the more tolerant Shannon approach. This led to “a clear clash with the administration,” where polarization “has led to an increasingly assertive Congress that has grown frustrated with administrative policy and has begun to take steps to challenge the administration for influence in the U.S.–Venezuela relationship.” While they stop short of offering a prediction on future policy, they believe Congress may sway the administration into a less tolerant policy. At times, the book reads like a “Greatest Hits” collection of Chávez’ global antics. The book could have benefitted from greater methodological rigor when testing its hypotheses. For example, while the “identity construction” theory can explain Venezuela’s alliances with rogue nations, alternative theories are not explored thoroughly enough. The reader is left wanting more answers as to why the Chávez regime needs to build this identity. The book would have also benefited from further exploration of the role that Chávez’ popularity played in giving him the freedom to pursue ideological interests. But the book’s greatest value is that it dispels some of the myths of U.S.–Venezuela relations, such as the chavista claim that Washington is motivated by an effort to control Venezuelan oil. As the authors point out, Venezuela continues to be a major petroleum exporter to the U.S., and actively seeks U.S. capital and technology in its oil sector. Moreover, the allegation of U.S. involvement in the attempted 2002 coup against Chávez is effectively disproved. What does the future hold for these friends/enemies? The authors wisely refrain from speculating, although they identify key factors that will influence the relationship. The trends include rising U.S. domestic oil production, changes in the composition of the U.S. Congress, and implications of Chávez’ departure from Venezuelan politics because of cancer. Iran’s nuclear program and its cooperation with Venezuela are also discussed, since a nuclear Iran is bound to generate a tougher stance against Venezuela. Given the uncertainties surrounding all of these factors, the bilateral relationship will remain on knife’s edge in the near future.