Brazil and Venezuela commit to rebuilding bilateral relations

President Luiz Inácio Lula da Silva received his Venezuelan counterpart, Nicolás Maduro, in Brasília in a sign that relations are thawing.

“We are in a hurry to resume relations with Venezuela and all of South America. Our ministers need to talk more, investors from both countries should talk more, universities should talk more about science and technology,” Lula said after a meeting with Maduro, according to a press release.

“It is necessary that Brazilian investors return to invest in Venezuela and South America and re-establish auspicious cooperation mechanisms, like we already had.”

Bilateral relations froze during the Jair Bolsonaro administration.

“We had a trade relationship that had a flow of practically US$6.6bn and today it is just under US$2bn. This is bad for Venezuela and it is bad for Brazil,” said Lula.

Rapprochement would also serve Venezuela, which grapples with sanctions imposed by the US and European countries.

“Venezuela went from an annual revenue of US$56bn due to oil to US$700mn. Last year, we grew 15%, with an economy mostly not dependent on oil for the first time in 120 years,” said Maduro.

But Venezuela has also a US$1bn debt with Brazil, which is overdue. The debt stems from infrastructure financing provided by development bank BNDES. Brazil will recalculate the debt and renegotiate payment terms with Venezuela.

Bolsonaro, meanwhile, told CNN that “I see with sadness this rapprochement with dictatorships. The current government has no appreciation for democracy by doing this. [Nicolás Maduro] represents what Lula wants for Brazil, people without freedom. What exists in Venezuela is a silent dictatorship.”

Mário Sérgio Lima, senior political analyst at Medley Global Advisors, told BNamericas that “at a time when the current Brazilian government wants to put Brazil back on the global geopolitical map, rapprochements with countries solely on ideological and political grounds is not the best option.”

Problems could also arise with congress. "Lula's rapprochement with Maduro is not positive in political terms. Amid domestic turmoil and needing to win in congress on crucial votes, the government's move is counterproductive," André Pereira César, a political analyst at Hold Consultoria, told BNamericas.