Bagley on Brazil: An Ambassador’s Departing Reflections
By Kandie Stroud, Skytop Host and Contributor / December 26, 2024
Kandie Stroud was voted a top female political strategist by Business Insider in 2021. Stroud has over 40 years of experience in strategic communications, political campaigns and journalism. She has worked in nine presidential campaigns and provided advice and communications strategy for gubernatorial, senate and congressional candidates, corporations and law firms. She was the first woman to serve as the chief diplomatic correspondent for CNN and has worked as a correspondent and/or commentator for Capital Cities Broadcasting, WRC-TV, WTOP-TV, ABC and Talk Radio News Service,
She was the Director of Broadcast Communications for the Democratic National Committee for a decade and has managed the radio bookings for six Democratic National Conventions. Stroud served as a senior advisor and communications director for John Delaney’s presidential campaign during the 2020 election cycle. She served as Director of Media Relations for the Credit Union National Association (CUNA).
Stroud is a best-selling author of the political campaign book How Jimmy Won (William Morrow).
She holds a bachelor’s degree in English from Boston College and is fluent in five languages.
Stroud served as board chairman of the Choral Arts Society of Washington and was a trustee for thirty years. She has performed with this symphonic chorus on concert stages around the world from South America to Russia, and from China to Europe.
Bagley’s World
Elizabeth Bagley races back to her Georgetown house from a morning of unexpected meetings at the State Department and must return for more meetings later today-- part of a process of offboarding -- wrapping up her two-year term as U.S. Ambassador to Brazil. Life is hectic in Bagley’s world. Last night she attended the Kennedy Center Honors and tonight she will attend a Fulbright event at the Brazilian Embassy. At the end of this week, she flies back to Brasilia for the final month in her embassy.
The house is humming. Her son, Conor Bagley, an award-winning Broadway producer and director, who has come down from New York to attend the Honors with his mother and sister, appears momentarily to retrieve his laptop, slipping in and out of the room so as not to disturb. Her phone buzzes incessantly and now the doorbell is ringing-- someone arriving to discuss a job with the Ambassador. But amid the chaos, she pauses for one hour of calm in her wood paneled library, relaxing in an armchair in front of a blazing fire to reminisce about her work in Brazil and the importance of U.S. investment in the world’s fifth largest country.
Why Brazil
For starters, we talk about why she chose Brazil as her final ambassadorial assignment. She could have had other significant posts. Bagley is a highly regarded diplomat with decades of experience who worked on the Panama Canal treaties, was the youngest Ambassador to Portugal under Bill Clinton, and served as senior advisor to multiple U.S. Secretaries of State, including Madeleine Albright, John Kerry, Hillary Clinton and Antony Blinken. Her foreign policy credentials, coupled with her prodigious fundraising for the Biden campaign, the Democratic Senatorial Campaign Committee, and the Democratic Party, made her a prime candidate for multiple plum assignments, including Paris, The Court of St. James, and, with her pure Irish lineage and decades of support for the Ireland Fund, the Emerald Isle.
But Bagley chose Brazil. She says it was at the urging of her good friends, former Climate Czar John Kerry, U.S. Special Envoy to South America Chris Dodd, and former Secretary of State Hillary Clinton. The trio emphasized Brazil’s potential as well as its importance to the health of the planet. “It’s going to be very challenging. It’s huge. It’s diverse. It’s polarized. It’s undergone a major revolution and a change in government. Our January 6 was their January 8 where they stormed the Brazilian capitol, so we share a lot of similarities; but the most important thing is they have the Amazon which are the lungs of the earth, so they all told me, ‘You must do this’.”
Challenge Accepted
Immediately, Bagley put the Amazon at the top of her list of priorities. She understood its strategic importance, not just for stabilizing the climate, but also for its vast resources—everything from gold, diamonds and trees to rare earth minerals. The Amazon is the world’s largest rainforest, spanning nine countries. But 60% of it is in Brazil. It produces 20% of global oxygen and fresh water and is the world’s richest and most varied biological reservoir, containing several million species of insects, birds, and plants as well as a wide variety of trees, including mahogany, rosewood and rubber trees.
Bagley has made five trips there during her time as Ambassador, most recently with President Biden. She is proud to have played a role making him the first sitting U.S. president to visit the Amazon. “Every chance I had I encouraged him to go and November 18 just before the G-20 Summit in Rio he went.”
Also, because of Bagley’s lobbying the State Department and Congress to come up with money for the Amazon Fund, Biden announced in May that he would provide $500 million over five years, money that goes directly to Brazil’s National Development Bank for fighting deforestation, improving conservation and helping the indigenous population. “No other administration has done that, not even Obama,” she says. “But Biden has prioritized climate since his early days in the Senate when he passed Deforestation legislation. He’s spent fifty years on this. When he was in the Amazon as part of his speech in Manaus, he announced the U.S. has already contributed $103 million towards the pledge.”
Before Lula came back into power, the Amazon was under heavy assault. Bolsonaro stripped it of millions of trees to make room for cows, agriculture and mines. “It was decimated. He undid all the regulations and let farmers come in and take down trees so they could graze their cattle. The deforestation was a catastrophe, but under Lula, 60% of it is back. He has reinstated the regulations and is re-foresting trees helping it to flourish again.”
She wants climate action to remain a priority.
U.S. Capital To Brazil
Bagley is bullish on continued American business investment in Brazil.
Brazil has been one of the world's economic success stories over the past decade. It is often said, “Brazil is the country of the future, and it always will be.” Says Bagley, “It has been a much better business environment under Lula than under Bolsonaro,” and she attributes Brazil’s burgeoning business investment to Lula’s successful passage of tax reform. Although inflation is up, the increasingly friendly tax laws and his limits on the heavy regulations have witnessed businesses coming in from abroad. “Now one out of every four dollars invested in Brazil is from the U.S. Last year our foreign direct investment (FDI) was $228 billion, which generates over 550,000 jobs, compared to only $30 billion from China, making the U.S. the largest single investor in Brazil. Our companies are very committed to more investment.”
U.S. companies are partnering with Brazilian companies largely on energy and critical minerals, with their funds flowing to the sectors of aerospace, automobiles, and mining. She mentions Boeing, GE, GM, Ford, electric vehicles, Boston Dynamics, Apex Brazil, Bravo, and Cloud. “We are also opening a lot of data centers in Minas Gerais. Some of our companies, like GE and GM, have been there 100 years and have CEOs who are Brazilian, so they bring in Brazilian workers. Also, in December of 2023 we relaunched the CEO Forum led by U.S. Secretary of Commerce Raimondo and Brazilian Vice President Alckmin, where 12 Brazilian and 12 U.S. CEOs met to see how they could work more closely together. That was a big success also.”
Bagley points out that mining is one of Brazil’s biggest and most profitable industries.
Brazil, with its vast deposits of gold, diamonds, platinum, lithium, iron ore, tin and coal, is witnessing a growing demand for these minerals in a decarbonizing world. The country boasts the world’s third largest deposit of rare earth minerals, which are in demand for the transition to clean energy. During the G-20 Presidents Biden and Lula announced the Clean Energy Transition Partnership, which will promote and develop biofuels, critical minerals and supply chains, reflecting their significance in the technological and clean energy sectors and the need for stable supply chains in critical industries. Brazil is among the top five mineral producers in the world. In the last 3 years alone, the country’s mining revenue increased by 62%. “Brazil has 17 of the 35 critical minerals and 94% of the niobium on the planet.” Niobium is a metal used to make jet engines, airplane bodies, superconducting magnets, and bridges.
Brazil’s most valued commodities are iron ore, gold, copper, and aluminum, diamonds and emeralds. But Brazil’s vast mining areas are situated in the Amazon. As a result, miners face the problem of damaging the environment and bucking up against climate regulations, so the mines in Minas Gerais must operate as ecologically as possible. In November 2024, the Chinese bought Brazil’s largest uranium reserve, a multi-billion-dollar transaction that raises questions about whether Brazil is selling its future to the Asian powerhouse.
China in Brazil
Over the past few decades, China’s investment in Brazil’s Amazon region has significantly grown, particularly in areas like agriculture, infrastructure and energy. China is Brazil’s largest trading partner. In 2023, bilateral trade between the two nations totaled $157 billion, with Brazil’s exports to China reaching $104 billion.
Brazil’s 50-year relationship with China intensified with the formation of BRICS in 2009, a consortium of countries consisting of Brazil, China, Russia, India and South Africa. Brazil represents the first letter in the acronym, and China represents the C. Now Egypt, Ethiopia, Iran and the UAE have become part of the group, which represents nearly half the world’s population, and they are de-dollarizing. But Bagley is not concerned that the business relationship between U.S. and Brazil will wane because of the growing influence of BRICS, nor is she worried that BRICS will adversely affect U.S. trade with Brazil. “Brazil needs the United States. We’re their biggest investor. They’re not going to change. BRICS is really a disparate group of countries. It’s not NATO, it’s not military. What I question is their ability to have a consensus because they don’t have anything in common.”
Bagley admits that China is Brazil’s number one trading partner, but says its activities are mainly transactional. “They are buying iron ore for their industry and agricultural products to feed their population. But they don’t invest much in Brazil.” As she was winging her way back to Washington on Air Force One with Biden, China's President Xi Jinping, who had been in Brazil for the summit, attended a state dinner where he hoped Lula would announce that Brazil would join the Belt and Road Initiative.
“Lula decided not to do that. He didn’t see any reason to join because they already had good relations; Xi was annoyed because he wanted this announcement, and he didn’t get it. So, there’s friction but at the end of the day China will remain a key trading partner.”
Brazil's Horizon Line
The middle class in Brazil has continued to grow, with tens of millions rising out of poverty.
According to a recent World Bank report, the middle class has grown by 50% in Latin America, with the Brazilian middle class contributing more than 40% of the overall increase in the region. Today, their middle class comprises nearly a third of Brazil’s 190 million inhabitants, although many feel their upward mobility is still tenuous. Middle class per capita income is between $188.12 and $727.86 per month. And in spite of tax cuts, their tax burden is still high.
In addition, middle class consumer behavior is largely sustained by credit, and they only have access to low quality public services. Lula has been providing incentives like tax cuts for the middle class, but because he grew up in grinding poverty, he is more focused on helping the disadvantaged. “When I presented my credentials, one of the first things I told him was, “our societies are mirror images of each other...Your January 8 was our January 6. We both have polarized electorates and we both have to take over from leaders that are antithetical to our values.” Lula answered, “I brought 22 million people out of poverty. The problem is they all went back under Bolsonaro, so I’ve got to get them back again.” He immediately did this by restoring his Bolsa Familia Initiative which provides unemployment relief as well as stipends for housing and education.
Agribusiness, she says “has been battered recently by severe droughts and wildfires, yet it is huge and growing.” Today, agribusiness represents 22% of Brazil’s GDP, one-third of all employment and almost 40% of exports. Brazil is the world’s largest producer and exporter of coffee, sugar, and orange juice, and is highly ranked in the production and export of soybean, corn, ethanol, pork, beef and poultry.
Bagley is proud that her many accomplishments as Ambassador have included establishment of a Task Force on Climate Change with John Kerry, The Clean Energy Transition Partnership, and the Partnership for Workers Rights, which established criteria on anti-discrimination, collective bargaining, stress relief in the work place and inclusion of these policies in the next G-20 Summit, which will be led by South Africa in 2025.
Bagley says she also raised $800,000 for Ancestral, her brainchild to bring together and celebrate Afro-American and Afro-Brazilian artists from slavery to present day. Fifty-eight percent of Brazilians identify as Afro-Brazilian. “It celebrated the relations between our two countries from the perspective of the African diaspora and how it is present in the visual arts. We held it at the Museum of Brazilian Art in Sao Paolo, with 132 works by great artists from both countries. Over 2,000 came to the opening. It was so successful that it will now go on tour throughout Brazil in 2025."
U.S. and Brazil Beyond Business
In addition to the G-20, 2024 marked the Bicentennial of Brazil’s independence. Two hundred years ago we saw the critical importance of Brazil’s immense riches and resources, and the U.S. was the first country to recognize its independence. We did it even before Portugal gave Brazil its independence, which is ironic,” says Bagley, the former Ambassador to Portugal.
“I wanted to celebrate this milestone by holding a significant event every month. For example, we brought the USS George Washington into the harbor in Rio with five other ships and had a big event with our two Navies to honor the 200 years of our military relationship. We also co-sponsored a conference on the history of U.S. - Brazilian relations with an exhibition in Brasilia that will move to the Museum of American Diplomacy in Washington which I started at the State Department. It will come here sometime next year."
To increase cross cultural experiences, Bagley invited the NFL to come to Brazil. To convince them to come she wrote to Roger Goodell and explained that there were already thirty-eight million Brazilians who watched the NFL every year out of 210 million people, so the potential to create a much larger audience was exponential. They came. “We had the first NFL game ever in South America between the Eagles and the Green Bay Packers. We had 49,000 at the game in Sao Paolo. The game was amazing, and Roger Goodell was so thrilled with the enthusiastic response from the Brazilian fans that he has committed to bringing the NFL back next year. This year they played in Sao Paulo, but Rio has the iconic Maracana stadium, which holds 86,000 people, which might be a more popular choice given the high demand for the game. The tickets for Sao Paulo were so popular they sold out within ten minutes. Even the Embassy had a hard time buying tickets.”
Though sad to be leaving Brazil, Bagley is big on its future. She’s also grateful that the two years she spent were consequential, starting with the yearlong celebration of the Bicentennial and the G-20, which included over 100 Ministerial meetings, which her embassy facilitated and participated in, and the president’s historic visit to the Amazon and the Leaders’ Summit. “The G-20 was huge, but there’s a lot more ahead.” Brazil will have the presidency of BRICS next year. Brazil will host the BRICS summit as well as the 2025 COP Summit. For her part, Bagley is proud to have played a significant role in helping Brazil shine more brightly on the world stage.