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Journal of Political Risk, Vol. 2, No. 5, May 2014.
By Matthew Michaelides
Abstract
Bilateral trade, high level personal communication, and military-technical relations between
Russia and Brazil have all grown significantly over the past decade. Recent weapons sales
to Brazil include a $150 million contract for MI-35 helicopters in 2009 and a 2012 deal for
seven Ka-62 helicopters. Moreover, the Russian defense ministry has indicated its intention
to increase Russian military capacity in Brazil and Latin America more broadly. This paper
examines the causes for the increasing depth of Russian-Brazilian military-technical
relations and concludes that informal patronage politics play an essential role in
understanding Russian actions. A detailed analysis of contemporary Russian-Brazilian
relations and existing theoretical perspectives is provided, as well as a thorough
examination of recent Russian arms and equipment sales from the informal patronage
politics perspective.
Introduction
The Crimean crisis has brought with it a number of startling results. The ruble has
plummeted, endangering current investments in the country, while prospective investments
in Russia should be viewed as incredibly risky although potentially very lucrative given
the volatile political climate. From a broader perspective, this all points in one direction: the
political and financial stakes of an adequate reading of Russian foreign policy are higher
than they have been in decades. Whether one is considering investing in Russia, in
countries with which Russia does significant business, or in other countries in the postsoviet space, the ability to predict Putins next move is invaluable.
Unfortunately, existing theories dont seem to help with this task. It is difficult to understand
the Russian invasion of Crimea as being in Russias national interest; indeed, many experts
have made just the opposite argument.[1] Arguments that emphasize the role of the
collective memory of Russians of the Soviet Unions glory days are slightly more convincing
in this case, but still fail to address why Crimea spiraled out of control when they did.[2]
This paper addresses this debate about Russian foreign policy using the test case of
Russian-Brazilian military-technical relations. Ultimately, I argue that informal political
More than anything else, Russian relations with Brazil in the Putin era have been
characterized by trade and increasing amounts of it. While Russian-Brazilian relations can
be traced back to the 19 century, it was not until 2001 that the two countries first reached
$1 billion in annual bilateral trade.[6] Since then, trade growth has only continued, albeit with
a drop following the worldwide financial crisis that, at $6.5 billion in bilateral trade, had
nearly been recovered in 2011.[7] The vast majority of Brazilian exports to Russia some
94% of the total are agricultural, including beef and wheat.[8] Russian exports to Brazil,
while more diverse than imports, are still about 65% fertilizers. Metals and high-tech
machinery and equipment register significantly at 12% and 11% of the total, respectively.[9]
While the balance of trade clearly favors Brazil, given that Brazilian exports to Russia
outnumber Russian exports to Brazil, the trade relationship still has the beneficial aspect of
allowing Russia to export industrial products in exchange for primary, agricultural products.
[10] This helps Russia support its coveted high-tech industries, including its defense and
nuclear power sectors.
th
Until 2011, investment between the two countries did not appear to be growing with the high
levels of bilateral trade. For example, in 2008, one of the best years for bilateral trade, total
investment between the two countries (Russia in Brazil and Brazil in Russia) totaled less
than $25 million.[11] Since then, however, a few important projects have boosted BrazilianRussian investment. In 2011, Gazprom opened a representative office in Rio de Janeiro.
Also in 2011, Russian billionaire Igor Zyuzin (owner of Russian steelmaker and coal
producer OAO Mechel) arranged an $800 million joint venture with Brazilian iron producer
Usina Siderurgica do Para.[12] TNK-BP and Brazilian HRT Participaes em Petrleo are
also jointly producing oil and gas from fields in the Amazon, and in 2011 Rosoboronexport
engaged in talks with the Brazilian government about a joint venture to produce light-armor
police vehicles (although it is unclear whether the project materialized).[13]
Along with this tremendous rise in trade and investment between the two states has come a
sharp increase in high-level personal communication. The first presidential visit came in
2002 when Brazilian President Fernando Henrique Cardoso visited Russia. Under Lula da
Silva, the vibrancy of exchange and interstate communication continued to grow, with
especially important state visits occurring in 2004 and 2005. President Dilma Rousseff
participated in two important visits including one with President Putin in Russia in December
2012 and another with Prime Minister Medvedev in Brasilia in February 2013. Furthermore,
in October 2013 Russian Minister of Defense Sergei Shoigu led a Russian delegation to
Brazil.
technology transfers with Brazil demanding the transfers of information and production
rights, while Russia has hesitated in many cases to comply has continued to add some
tension to the military-technical relationship between the two countries. Still, it is notable that
other military-technological exchange between the two countries has grown dramatically
even in the aftermath of the Brazilian-French deal and tension over technology transfers. In
fact, according to Russian Technologies, weapons deliveries to Brazil from Russia from
2008-2012 totaled $306.7 million, a sharp increase over the total of less than $100 million
from 2000-2010.[23]
Theoretical Perspectives
There are two scholarly perspectives on contemporary Russian foreign policy towards
Brazil. Of course, given the strength of the economic relationship between Russia and
Brazil, both of these views assume the importance of trade and, to a lesser degree,
investment. Where they differ lies in the role of these economic interactions in the broader
Russian-Brazilian relationship.
The economic hypothesis of Russian foreign policy towards Brazil argues that the
relationship is based on the Russian states interest in expanding trade abroad in all
countries. From this perspective, Brazil is an important partner of the Russian state solely
because of economic benefits of the relationship. The key argument in this hypothesis is
that there is no underlying strategic basis for the economic relationship for a few reasons.
First, it argues that the geographic distance between Brazil and Russia makes strategic
considerations a far less significant part of the relationship between the two countries. As
most analysts would point out, Russias core security interests lie in its near abroad. Thus
there are few, if any, repercussions of Latin American regional security on Russian security.
Second, as W. A. Sanchez points out in his assessment of Russian relations with Latin
America, Russia is generally willing to sell weapons to any country that has the money to
pay for them.[24] In this sense, weapons sales to Brazil do not occupy a special
geostrategic position for the Russian state. This economic perspective on Russian foreign
policy towards Brazil stresses that while military-technical trade may be part of the
economic relationship, the motivations behind such trade are no different than they are for
any other commodity.
The alternative geostrategic hypothesis, however, disputes the point that Russian
economic interests in Latin American do not underlie a broader strategy towards the region.
[25] Indeed, it suggests that these economic interests in Brazil, and in Latin America more
generally, are a way for Russia to gain influence in the Latin American region, particularly at
the expense of the United States. These theorists typically point to a lack of concrete and
consistent U.S. policy towards Latin America throughout the first decade of the 21 century
as an invitation to Russia to cultivate influence in the region.[26] In the Brazilian case, trade
st
with Russia increased dramatically in the first few years of this period from $1 billion in
bilateral trade in 2001 to over $6.5 billion in 2008.[27]
The recent October 2013 visit by Russian Minister of Defense Sergei Shoigu to Brazil
provides one example of how this perspective could work in practice. The diplomatic and
trade mission included an attempt by the Russian defense industry to challenge a $4 billion
deal that had almost been completed between Brazil and Boeing for 18 fighter jets. The
opportunity to jump into the deal came as the deal between Boeing and the Brazilian
government stalled under the revelations of extensive spying on Brazilian president Dilma
Rousseff by the NSA.[28] In other words, the NSAs spying gave the Russians an
opportunity to encroach on traditional U.S. influence in the region. John C. K. Daly similarly
argues that Russian-Brazilian nuclear relations have grown in recent years because of poor
and unstructured U.S. foreign policy towards Latin American under President George W.
Bush.[29] More recent evidence for this position has come in statements by Defense
Minister Sergei Shoigu that Russia intends to expand its permanent military bases into Latin
America, particularly in Venezuela, Cuba, and Nicaragua.[30] Thus, the geostrategic theory
suggests that in these cases and others Russia has acted and will act opportunely to swipe
influence from the United States in Brazil and in Latin America more generally. Rather than
being the explicit goal of Russian foreign policy, trade is merely a tool for garnering influence
in the Latin American region.
The Informal Politics Hypothesis
This paper finds that the above theoretical debate to a great degree misses the point: both
hypotheses fail to account for the role of domestic politics in the determination of foreign
policy. Given what scholars know about the importance of patronage politics in domestic
policy-making, it is only logical for such a system to stretch into foreign policy decisionmaking as well.[31]
Take, for instance, the highly publicized long-term animosity between Prime Minister Dmitry
Medvedev and head of Rosneft Igor Sechin. Each of these powerful Russians is intimately
affiliated with a group of politically interested individuals: Medvedev is a key member in the
Gazprom-affiliated St. Petersburg liberal faction, while Sechin is among the most dominant
members of the siloviki, a group of individuals associated with the Russian security
services and that support Gazprom rival Rosneft. The dislike of Medvedev and Sechin for
one another is long-standing and emblematic of a deeper struggle for power between the
two competing groups.
On one level, this tension has had immediate results in the domestic sphere. After
becoming president in 2008, Medvedev publicly demoted Sechin from his position as deputy
chief of staff to deputy prime minister. Then, in 2011 Medvedevs government produced the
passage of a law that would force Sechin to step down from his position as chairman of the
Board of Directors at Rosneft. Since then, Sechin appears to have gained the upper hand in
the competitions after, for example, Putin allowed him to acquire the board chairman
position at Rosneftegaz. Thus, on the domestic level, one could argue quite easily that
political and business appointments are intimately influenced by a system of patronage
networks in which Medvedev and Sechin have found themselves at odds because of their
affiliations in competing patronage groups.
At the same time, the informal patronage politics hypothesis is important, because it offers
the theoretical framework for expanding the results of these political competitions to the
international stage. For instance, in Iran, Putins recent favoring of Sechin over Medvedev
has meant that Rosneft and not Gazprom was allowed to win a $2.9 billion purchase
agreement of Itera Oil & Gas. And, broadly speaking, Russian foreign policy to Iran writlarge has reflected Irans role as a potential competitor of both Rosneft and Gazprom in the
international oil and gas markets.[32] Similarly, Russian actions towards the Iranian nuclear
energy program appear to have been derived more from the commercial interests of the
elite Russians involved in the project.[33] In this sense, under the informal patronage politics
theory, the ability of elite individuals in Russian government and business to gain financially
is a key variable for understanding how Russian foreign policy is developed. Here, I build
upon this framework for understanding Russian foreign policy in the Russian-Brazilian case.
Given the difficulty in drawing specific conclusions about the actions of top Russian officials
behind closed doors, the informal patronage politics hypothesis uses other, more
observable metrics to discern the influence of informal patronage networks on foreign policy
outputs. To that end, three key predictions should be observed in Russias foreign policymaking.[34] Prediction (1) is that all interactions with other officials, even outside of the
patronage network, will be perceived as planes of competition or network-building.
Individuals in patron-client regimes will engage in mirror-imaging, whereby they perceive
that the political constraints that others face are similar to their own. Prediction (2) holds that
the leaders of informal patronage networks will act aggressively in their foreign policy
choices to signal their strength. Lastly, Prediction (3) is that foreign policy choices will shift
along with changes in domestic coalitions and the economic incentives that leaders and
their clients derive from particular foreign policy outputs. Below I explain the relevance of
these predictions to the Russian-Brazilian case. Predictions (1) and (3) are of particular
explanatory importance.
The most striking observation in the Russian-Brazilian case that fits the informal patronage
politics hypothesis, specifically prediction (1), is the distinct policy shift in Russias weapons
sales towards Brazil and other states since the emergence of Sergei Shoigu as Minister of
Defense. The prior Russian Minister of Defense, Anatoliy Serdyukov, known for his
unpopular reforms of the Russian military, very infrequently forayed into promotion of foreign
military sales. Yet, after his resignation in November 2012 following charges of corruption
and offending his father-in-law and very high-level Putin affiliate Viktor Zubkov by cheating
on his wife, the new Russian Minister of Defense Sergei Shoigu has interestingly taken a
very different role in marketing Russian weapons internationally. In a somewhat
unprecedented fashion, Shoigu has just in the past year engaged in several trips abroad to
foreign countries, including Brazil, Peru, Egypt, and Myanmar, to sell Russian weapons.[35]
Serdyukov, in general, only engaged in weapons sales in high-profile cases, for example in
the case of selling weapons to Bashar Al Assads government during the Syrian Civil War.
This type of involvement can be seen as more traditional, in that it only consisted of
intervention in weapons sales when they were relevant to national security. Thus, Shoigus
role in Rosoboronexports mission of late constitutes perhaps the greatest level of
involvement of the Ministry of Defense in weapons exports since Rosoboronexport was
formally organized under the Ministry of Defense.[36]
At the same time, Shoigus leadership appears to have led to a decisive change in the way
Russia has handled technology transfers to Brazil. Despite previous hesitation, 2013 saw a
series of offers to Brazil by the Ministry of Defense to authorize the transfers. For instance,
the February 2013 contract by which Russia will provide Brazil with Igla and Pantzir-C1 air
defense systems includes a technology transfer component, permitting for the hardware to
be manufactured in Brazil.[37] Later, in May, Rosoboronexport announced its willingness to
export Su-35 fighter jets with a technology transfer, even despite its unwillingness to offer a
technology transfer for the jets in 2008.[38] In October, Rosoboronexport reiterated its offer
after the contract with Boeing for the fourth generation fighters stalled following revelations
of NSA spying on Brazil. Understanding why these policy changes occurred requires an
analysis of who caused the changes. It provokes the question, why Sergei Shoigu?
The choice of Sergei Shoigu as Minister of Defense is interesting for a few reasons. First, in
his previous job as Minister of Emergency Situations, Shoigu was considered one of the
most popular high-level officials at the cabinet level. Clearly, this represented a drastic shift
in popularity from the despised Serdyukov. Second and most notably, however, Shoigus
appointment is another glaring example of a continuing trend throughout Putins time in
power: the encroachment of the siloviki on the highest levels of Russian government.[39]
Unlike his predecessor, whose civilian background in the tax ministry was the subject of
great outrage at the time of his appointment, Shoigu is a clear member of the siloviki.
Moreover, Serdyukovs position as a leader that was uniformly detested by members of the
military and security services made him even less likely to act in the interests of
certain silovik factions.
However, Shoigu is not just any member of the siloviki. Indeed, in Jrgen Strauns 2007
report he notes that Shoigu constituted a third tier member of the siloviki, making him
lower in rank than Putin magnates like Igor Sechin, Sergei Ivanov, and Sergei Chemezov.
[40] This means that, especially given his newcomer status alongside these powerful
individuals, Shoigu would be politically subservient to Chemezov, among others, and would
need to cater to his interests.
This helps to explain the shift in Ministry of Defense policy towards states like Brazil in the
realm of weapons sales. Shoigu appears to be putting his own energy and political capital
into making these high-profile weapons deals for the benefit of Rosoboronexport, Russias
state arms-exporting monopoly, which is de-facto run by Sergei Chemezov. From this
perspective, it would also make sense for Shoigu to be more willing than his predecessor to
divulge military technology in the form of technology transfers, if doing so could increase the
chances that Russia would get Brazilian weapons contracts. Chemezovs personal influence
has also been explored in the context of other international Russian weapons sales, and
Brazil may just be another example of how his personal interests can be inflected into
Russian state policy.[41]
The actions of the Russian side in the context of the issue of technology transfers also
provide important evidence to fit prediction (1) of the informal patronage politics hypothesis.
Indeed, the persistence by the Russian side in trying to make a deal with the Brazilian Air
Force even after the Sukhoi jets had been excluded from the list of finalists demonstrates a
classic case of mirror-imaging.[42] Different sets of internal and external power dynamics
for the Brazilian Air Force and Rosoboronexport meant that the top officials at
Rosoboronexports involved with the October 2013 announcement did not perceive the
constraints that prevented the Brazilian Air Force from considering the Russian bid. The
Russians did not understand that the Brazilian Air Force would have greatly damaged its
credibility as an international arms purchaser were it to have accepted the Russian bid.
Even considering the Sukhoi bid after it had already been eliminated from the running in
October 2008 would have seriously threatened the agencys legitimacy, particularly given
that the Brazilian government indicated that it would not accept new bids for the project on
multiple occasions prior to the October 2013 announcement.[43] Thus, even if the Brazilians
did want to accept the bid, they could not be seen to completely ignore their promises. The
option to contract with Rosoboronexport outside of the original Brazilian tender, suggested
by some, would also not have been viewed well by the international community, even if it
were not coupled with a delay or cancellation of the original tender.[44]
do not harm the leaders power, wealth and authority.[45] In other words, a strategy based
on providing economic and geostrategic benefits to the state is not incompatible with the
informal politics explanation unless favoring those factors detracts from the power and
wealth of the leader. In this way, my explanation for Russian foreign policy towards Brazil
permits alternate hypotheses to have explanatory power in some cases, given the
constraints of a patronage variable.
Russian-Brazilian military-technical relations are more complicated than they may appear.
While trade does constitute the largest and most visible part of the relationship, other factors
beyond the states ability to benefit from the economic relationship are at play. Future
scholarship on the Russian-Brazilian relationship must examine how these individual
interests impact the primarily trade-based relationship between Russia and Brazil.
Matthew Michaelides is a student at Columbia University, where he studies
political science and economics, with a focus on Latin America. Dr. Anders Corr
provided editorial oversight for this article. JPR Status: working paper, archived
May 30, 2014.
[1]Interview with Kimberly Marten on NPR: How Crimeas Annexation Plays to Russians
Soviet Nostalgia, National Public Radio,March 25, 2014. Accessed March 30, 2014.
http://www.npr.org/2014/03/25/294324006/how-crimeas-annexation-plays-torussians-soviet-nostalgia
[2]Jeffrey Mankoff, Russian Foreign Policy: The Return of Great Power Politics, 2011.
[3]For example: Alexandra Koval, Contemporary Perspectives and Trends in RussianBrazilian Relations, Russian Analytical Digest, 14 February 2011.
[4]Taken from President Lulas remarks at the October 2005 meeting between Presidents
Putin and Lula in Moscow.
[5]Oliver Steunkel, Why Brazil has not criticized Russia over Crimea, NOREF Policy Brief,
May 2014.
[6]Alexandra Koval, Contemporary Perspectives and Trends in Russian-Brazilian
Relations, Russian Analytical Digest, 14 February 2011.
[7]Russian State Federal Statistics Service
Minister of Defense did not agree. John C. K. Daly alludes to this controversy in his article:
John C. K. Daly, Moscow Loses Brazil Submarine Deal to Paris, Eurasia Daily Monitor
(5:27), February 12, 2008.
[39]Siloviki is a Russian word that refers to the members of the security services, including
but not limited to those in the former KGB, the FSB, and the police.
[40] Jrgen Straun, Siloviki Versus Liberal-Technocrats: The Fight for Russia and its
Foreign Policy, Danish Institute for International Studies (2007:9).
[41]Matthew Michaelides, Petrol Patronage: How Crony Capitalism Affects Russias
Relations with Iran, Columbia Political Review (Fall 2013).
[42]Kimberly Marten, Informal Political Networks: Foreign Policy Implications from the
Russia Case, unpublished paper prepared for delivery at the PONARS Eurasia Workshop,
Washington, DC, March 2013.
[43]Gareth Jennings, Russia to offer fighter sales and development to Brazil, IHS Janes
Defense Weekly, October 14, 2013.
[44]Ibid.
[45]Kimberly Marten, Informal Political Networks: Foreign Policy Implications from the
Russia Case, unpublished paper prepared for delivery at the PONARS Eurasia Workshop,
Washington, DC, March 2013.