Brazil’s ex-president Dilma Rousseff: US-China conflict is neoliberalism vs socialism

We’re pleased to republish this very useful article by Ben Norton in Multipolarista, introducing and summarizing Dilma Rousseff’s keynote speech at our recent webinar, 21st Century Socialism: China and Latin America on the Frontline (at which Ben also spoke).

Brazil’s former president Dilma Rousseff has condemned US meddling and “hybrid war” in Latin America, while simultaneously praising China for creating a new model of economic development that challenges US-led neoliberal capitalism and the “Washington Consensus” imposed on the world.

“We want, basically, to be able to break with the Monroe Doctrine,” Rousseff said, referring to the nearly 200-year-old colonial doctrine in which the US government claims Latin America as its geopolitical “backyard.”

“We want Latin America to be for the Latin Americans, and not as the US wants it, in the Monroe Doctrine, which means Latin America for the North Americans, precisely the opposite,” the former Brazilian head of state added.

“The so-called hybrid war unleashed by the US through second-generation coups, lawfare processes, and sanctions against Cuba and Venezuela led to a great setback, returning to the continent the inequality, misery, and hunger that had been overcome, or that it was about to get over,” she lamented.

A leader of the left-wing Workers’ Party, Rousseff served as president of Brazil from 2011 until August 2016, when she was overthrown in a soft coup backed by the US government and her country’s powerful right-wing corporate oligarchy.

Rousseff spoke about the increasing conflict between the United States and China not as a mere interstate dispute, but rather the result of “a rivalry of two systems”: US-led neoliberal capitalism versus socialism with Chinese characteristics.

“The so-called Washington Consensus, a concept adopted by conservative Latin American governments, imposed the deregulation of the economy, the drastic reduction of the role of the state, and the abandonment of social and development policies,” she said.

These neoliberal capitalists “condemned Latin America to be the most unequal continent in the world, with reduced economic growth, concentration of wealth and income, and specialization in the production of raw materials,” Rousseff commented.

The former Brazilian president praised China for creating a “new development paradigm” based on “shared development” and “common prosperity.”

China and Russia are also leading the development of a “new geopolitical pole,” she said, and this offers opportunities for Latin America to be more independent.

Rousseff made these comments in a panel event on March 19, a virtual conference titled “21st Century Socialism: China and Latin America on the Frontline,” organized by the group Friends of Socialist China.

Multipolarista also obtained a copy of Rousseff’s Portuguese-language prepared speech, and has translated her key points into English below.

Dilma Rousseff: Latin America needs independence

“Brazil always had a position of absolute independence with regard to international relations, with all countries in the world,” Dilma Rousseff emphasized at the beginning of her talk.

“Latin America wants to have an autonomous and independent position,” she said. “It is not possible to continue reproducing the inferiority complex of the conservative elites and oligarchies that have done nothing but submit to the United States in a shameful way.”

Rousseff argued that China has played an important role in balancing Latin America’s political and economic relationships, so the region is not so dominated by Washington. In this sense, Beijing has helped the region maintain independence and strategic autonomy.

China is Brazil’s largest trade partner, and the largest trade partner for many other countries in the region, she noted.

“Latin America’s position is not with the United States,” she stressed. “Latin America’s position affirms sovereignty, our position is independence, at the side of China. And this independence is not just for individual countries; it’s for the region.”

Rousseff emphasized the importance of institutions like the BRICS, the framework integrating Brazil, Russia, India, China, and South Africa.

The BRICS “sought to reduce this unfair asymmetry” represented by institutions like the International Monetary Fund (IMF) and World Bank, which are dominated by the United States and Global North countries, she noted.

“Compared to the US, China has more respect for the role played by international organizations,” Rousseff added. Beijing defends multilateralism while Washington has attacked the United Nations and withdrew unilaterally from the Paris Agreement, she recalled.

Unlike the United States, Rousseff argued, China has been a more equitable partner. And leaders in the Global South are increasingly looking to Beijing for lessons on how to develop their own countries.

US elites seek to ‘contain’ China and its model of ‘extraordinary development’

Dilma Rousseff applauded China for its “extraordinary development,” and for lifting more than 800 million people out of absolute poverty.

She noted how China was an exemplary model for managing the Covid-19 pandemic, juxtaposing it against the public health disaster in the United States, where nearly 1 million people have died.

China’s success in the pandemic, and its leading role in sending vaccines and protective equipment around the world, reflects its relative rise, whereas Washington’s failure shows its comparative decline, Rousseff argued.

The former Brazilian president traced the beginning of Washington’s new cold war on Beijing back to the 2008 financial crisis. While the West was suffering, the crash did not significantly affect China, Rousseff noted. This led US elites to decide that China had to be contained; its economy had to stop growing so rapidly.

The Barack Obama administration’s attempt to create a Trans-Pacific Partnership (TPP) was aimed at economically isolating China, she stated.

Rousseff called this part of a larger US “containment policy,” and argued it is “extremely flawed and harmful to everyone.”

US policy toward China subsequently “became very aggressive” under Donald Trump, and while the Joe Biden administration has tried to portray itself as more “diplomatic,” she noted, Washington has still pushed a needlessly hard line against China.

US-China conflict is between two distinct economic systems: neoliberalism vs. socialism

Speaking of the US “prejudice” toward China, Dilma Rousseff noted that Western politicians have espoused chauvinistic views that China, or any other nation, could not develop without adopting their own model based on the free market and liberal democracy.

Although she refrained from referring to the conflict as a new cold war, the former Brazilian leader stipulated that the crisis in US-China relations is a result of their two contrasting economic systems.

“China has become a kind of factory for the world, while the US has de-industrialized, losing economic muscle and transforming itself into a kingdom of finance, with a fantastic concentration of income and wealth.”

Neoliberalism is specifically what “laid the foundations for the decline of the US,” Rousseff said.

There are three serious problems caused by neoliberalism, she argued: “the financialization of the economy, the increase in income and wealth inequality, and the erosion of democracy.” And these ills “are prevalent in all capitalist countries.”

“The biggest problem with this system is the widening gap between rich and poor,” Rousseff cautioned. She cited Nobel Prize-winning economist Joseph Stiglitz, who “admitted that 40 years of neoliberal practices have severely weakened the role of the state and public health policies, rendering the West helpless in the face of the pandemic.”

“China is accelerating its policy toward a society where equity prevails,” she said, “while in capitalist countries, including the US, per capita income has concentrated and jobs have stagnated or shrunk. Social wealth is rapidly concentrated and the richest 1% is getting even richer.”

“The financialization of the economy as a result of neoliberalism is the culprit that kills the dynamism of the capitalist system itself. Credit and finance gradually become obstacles rather than driving forces of production.”

“The pursuit of limited government, uncontrolled labor market liberalization and the pursuit of profits lead to a rapid accumulation of financial wealth for those at the top of the social pyramid and de-industrializes the economy.”

Rousseff contrasted these systemic problems of neoliberal capitalism with the alternative proposed by Beijing.

“China’s strength lies in its pursuit of the path of socialism with Chinese characteristics,” she argued. “This path follows the law of the market, but attaches strategic importance to the role of the state.”

“The market mechanism and macro-regulation complement each other in China. Open to domestic and foreign private investment, it has increasingly controlled the distortions of oligopoly and speculation.”

Chinese “regulation of economic activity acts to preserve competition and avoid financial bubbles and market distortions,” while the state ensures stability with “tighter control over real estate and tutorial services.”

Rousseff praised China for creating a “new development paradigm” based on “shared development,” and commended Beijing for its idea of common prosperity.

Neoliberalism undermined US education and technology

The United States has historically had excellent systems of education, science, and technological development, but this intellectual infrastructure has been in decline since the emergence of neoliberalism in the 1980s, and is at threat because the ultra-capitalist model has led to a massive disinvestment, Dilma Rousseff argued.

On the other hand, China has become the world’s new leader in science and technology, thanks to its heavy public investment and state leadership, she said.

China’s progress led Washington to launch a “technological lockdown” on Beijing, she noted, pointing to the ongoing “chip war” over control of semiconductors.

The world knows that the Chinese company Huawei has the best 5G technology, and it is also cheaper than its US competitors, Rousseff stated. But “the US tries to prevent other countries from using Chinese 5G technology, even if they don’t have alternatives of their own to offer.”

Meanwhile, neoliberalism has led to technological stagnation, the former Brazilian leader stated, because “companies only want and can only make money quickly, bringing limits to R&D activities.”

Dilma Rousseff condemns US sanctions and ‘dollar hegemony’

China’s historic development, economic growth, and scientific and technological advancement have created opportunities to challenge “US dollar hegemony,” Dilma Rousseff argued.

“In the financial sector, US dollar hegemony faces new challenges. As a global currency, the US dollar holds an irreplaceable position in international trade and payments. This has made the dollar a weapon of retaliation and a tool of extortion against other countries.”

“Here in Latin America, we have two terrible examples: 60 years of blockade against Cuba, and now more recently the blockade on Venezuela, at a time of pandemic.”

“The US government has been imposing far-reaching sanctions on foreign banks and companies that do business against the US’s wishes with countries like Iran, Venezuela, Cuba and now Russia. They use their national jurisdiction as an international weapon. Given this, it is unlikely that the dollar will remain irreplaceable forever.”

Dollar hegemony is also based on the SWIFT inter-bank messaging system, Rousseff said, which Washington has turned into a financial weapon.

China began testing its own alternative to SWIFT as far back as 2015, she noted, and it is still being developed, but this process has been accelerated by the war in Ukraine.

The People’s Bank of China has been testing digital currencies, including its own sovereign digital renminbi, Rousseff added.

She criticized the US strategy of “decoupling” from China, calling it “absurd,” because Beijing is thoroughly integrated into the world economy, in complex webs that involve many nations.

“In 2019, around 100 countries around the world traded and invested more with China than the US, and that number is still growing,” Rousseff said.

China signed the Regional Comprehensive Economic Partnership (RCEP) in 2020, she noted. This free trade agreement in the Asia-Pacific region involves nearly one-third of the global population and 30% of the global economy, making it larger than the European Union.

A ‘new geopolitical pole’ is being created, led by China and Russia

The global political and economic system is in a process of fundamental change, Dilma Rousseff said. And “there is no more significant geopolitical consequence today than the growing strategic partnership between China and Russia.”

“Ironically, it is precisely the maximum US pressure on Russia and the containment of China that played a key role in bringing the two countries closer together,” she added.

“The economic sanctions stemming from Russia’s annexation of Crimea and now the war in Ukraine are strengthening a new geopolitical pole, and accelerating changes that would only come slowly.”

In regard to the war in Ukraine, Rousseff complimented China for maintaining a neutral policy. The former Brazilian president called for peace while emphasizing how NATO helped to create the conflict in the first place.

She emphasized that Latin America must unite and maintain an independent foreign policy, while seeking opportunities with this new geopolitical pole.

Latin America needs to adapt to the changing economic order, she argued, to reduce its dependency on export of commodities, and “seek re-industrialization with new characteristics,” to partake in the new “technological revolution.”

“Whoever remains as a mere importer of this technology,” she said, “will remain on the periphery, submitted and subordinated to foreign interests and policies.”

“The transformation of the productive model is the main challenge for Latin Americans, to recover a path that allows them to achieve considerable economic growth with social justice.”

“Producing and exporting mineral or agricultural commodities alone does not support equitable growth. Another model is needed for our region to reach high levels of industrialization and have a great capacity to add value to production based on the quality of education and work and scientific-technological innovation with the generation of better jobs.”

Regional integration is a key part of this process, Rousseff stressed.

“A true integration of Latin America is essential,” she said, noting the region has nearly 1 billion people, with “fantastic natural resources,” including oil, minerals, agricultural products, and water reserves.

“The creation of UNASUR and CELAC was the political-institutional framework needed to ensure our autonomy and independence and enable an integration that would not only be commercial, but also productive, industrial, and educational, in order to reduce asymmetries and inequalities between countries and regions.”

Progressive governments in Latin America need to increase the “presence of the state in the economy, the defense of the sovereignty of nations and democracy, and an open geopolitical relationship,” she added.

China’s economic partnership and its Belt and Road Initiative offer many possibilities for the region, presenting an opportunity to be more independent, Rousseff argued.

What “is wanted is Latin America for Latin Americans,” she said, “to be able to break with the Monroe Doctrine.”