Few other countries in the world have experienced such a positive boost since the start of the Ukraine war as the countries of South America. This applies above all to Brazil, but also to Chile, Peru, Colombia and even Argentina. Evidence of this are the currencies and stock markets in these countries, which have appreciated sharply since then.
The export industries there are benefiting from the rising prices for raw materials – from soya to copper – and energy. Inflation rates are also increasing in South America, and farmers will soon suffer from a lack of fertilizers. But there is no food crisis.
The South American central banks have also reacted more quickly to inflation by raising interest rates than the European Central Bank (ECB) and the Fed in the USA.
Brazil is benefiting in particular from the fact that funds are currently reallocating their investments. They withdraw their capital from companies, industries and regions that have been negatively affected by the war – directly or because they comply with Western sanctions against Russian corporations. Capital inflows into Brazil grew at a record pace in the first three months of the year.
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In addition, the geopolitical weight of the region will grow in an increasingly polarized world. All three power blocs worldwide – USA, China, Russia – are currently trying to win over Brazil and South America as partners.
Block leftists, greens and lobbyists
The European Union (EU) is politely holding back. Brazil’s President Jair Bolsonaro is burning down the rainforest: With this argument, European left and green politicians as well as the farmers’ lobby in Brussels reject any cooperation with South America.
The question now is whether we in Germany and Europe want to watch other powers increase their influence in South America. Or whether we become active and offer strategic partnerships. Gladly provided with environmental clauses, which many would also welcome in South America.
It’s quite simple: We need reliable suppliers for raw materials, food and – green – energies more urgently than ever. We need markets for our products and the worldwide exchange of personnel. And last but not least, we need democratic partners in the world.
In South America there is everything. Tesla, Ford and Porsche have recognized this and are signing exclusive contracts with raw material suppliers in South America.
We have to act now and use this potential for ourselves before it’s too late and others do it. The time window is not open for long.
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