US President Joe Biden has announced his country’s intention to contribute US$500 million to the Amazon Fund, the Brazilian mechanism for financing forest protection and combating deforestation. This amount is 10 times higher than the funding he promised last January and was pledged shortly after the Brazilian President, Luiz Inácio Lula da Silva, paid a visit to China which experts viewed as detrimental to Brazilian-US relations.
The announcement was made last week during the Virtual Forum of Large Economies on Climate and Energy, organized by the White House and attended by the world’s 26 main economies, including Brazil. During this virtual meeting, Biden said,
“Today, I’m pleased to announce that I will request the funds so that we can contribute US$500 million to the Amazon Fund and other climate-related activities over the next five years to support Brazil’s renewed effort to end deforestation by 2030”.
Biden stated that the request would be tabled at the US Congress which still needs to approve the donation. Should it be approved, the amount will be disbursed over the next five years.
Despite the significant increase, analysts consulted by DevelopmentAid described the announced donation as “timid”. They did not rule out that it could have been prompted by the outcomes of Lula’s visit to China which, as they said, could be viewed as “a cooling off” in relations between Brazil and the USA.
During his visit to Asia this April, Lula met Chinese President Xi Jinping and agreed to use local currencies in their commercial transactions, leaving the dollar – the official currency in international business – aside.
“I don’t want to have hegemony over anyone, but it is necessary to create a new form of world governance,” said Lula in an interview in China. “Our American friends are always concerned about anything new that is created in relation to the currency because they think that people want to do away with the dollar. The same happened with the Euro. Brazil and China are giant countries dependent on the American currency,” Lula highlighted.
These quotes fell like a “bombshell” on American diplomacy as well as the country’s press which have always viewed Brazil as being aligned with the US economy. Brazil’s agreement signed with China, worth US$10 billion, only added to their concerns.
“The US would like Brazil to take a much more pro-American position on a number of issues, but Brazil does not see the US as a practical partner. During the visit in January, Biden and Lula did not sign any agreements, whereas the Brazilian President returned from Asia with 15 signed agreements that would generate billions for the Brazilian economy,” analyzes Vinicius Vieira, Professor of International Relations at FAAP.
“The Brazilian government needs concrete signs of cooperation — above all financial — because it needs a massive inflow of resources to be able to carry out its agenda in several areas,” he added.
“The announcement by the United States is commendable, but it is still very little compared to the challenge that Brazil faces in the Amazon. We have had the last four years of advance of illegal mining in indigenous lands and the strongest organized crime in the region,” explains Estevão Benfica, a researcher at ISA. “Brazil, like the other countries in the Legal Amazon, need a more present collaboration to be able to meet the challenges of climate change,” he noted.
Since taking office as Brazilian President, Lula has reactivated the Amazon Fund which is managed by the National Bank for Economic and Social Development (BNDES).
The fund had been frozen since 2018 throughout the administration of former President Jair Bolsonaro, known for his forest-destruction policies. By 2018, the fund had reached 4.3 billion reais (US$831 million) mainly from Norway and Germany, with Norway clearly having the upper hand having contributed over 90% of the funds.
Shortly after the reactivation of the fund, Germany made a new deposit of 192 million reais (US$37 million) and France and Spain have announced their readiness to contribute to the fund in the near future. The United Kingdom and Canada have also indicated that they may contribute to the fund in the future.
Donations are essential to combat deforestation and halt illegal mining in the Amazon. The latest statistics show that even with the help of the international community, it will not be easy to reduce deforestation. According to Imazon, deforestation in the first three months of 2023 was equivalent to almost a thousand football fields per day – a result that was only worse in 2021.
