BRICs v. Smaller European Economies: Could Portugal Become “New Brasil”?

An idea was floated by LEX at the FT.com by author Edward Hadas to have BRIC economies help with the European debt crisis by absorbing them into their own countries, namely Brazil could absorb its former colonial master, Portugal, and easily handle their debt in its large growing economy. In an Op-ed by the LEX team and in a video interview in response to commentary in the Op-ed, Mr. Hadas details the rationale of Portugal becoming New Brasil, a response to many proud Portuguese to the suggestion that debt could force Portugal into becoming a colony of Brazil. One poster even suggested that the British should then become a colony of India. This was shared with a debate showing investment in the Mexican Peso is more sensible than investments in British Pounds, this scenario resulted in a discussion in the video highlighting this comment. While Britain becoming New India is not feasible at the moment due to the largess of the current British economy, Portugal, while a wealthier nation per capita is only about 10% of Brazil’s economy as suggested in the video interview. The value of being able to call yourself a nation might not have a value in Euros or Dollars or Real, but the view of Portugal as Europeans did not come into debate, it was a debate on Portugal being dominated by a former colony that seemed to illicit the most concern. If this is the case, how European can we assume EU members are and is it of concern to them? In addition, are BRICs absorbing smaller developed economies a feasible solution to European and International debt crisis?

The relationship between Portugal and Brazil, as well as Spain and many Latin American former colonies do not always reflect colonialism as seen in the late 19th and early 20th centuries. Much of Latin America, including Brazil achieved independence from their colonial masters in the early 1800s and have had a lot longer time developing as independent nations with independent economies from their original colonial ties well before those colonies in Africa and Asia. Many Latin American nations celebrated 200 years of independence in 2010 and besides immigration coming from former colonial masters for generations, countries like Brazil have developed apart from Portugal for many generations. Interestingly enough, the Royal Family and government of Portugal left to take refuge in Brazil during the Napoleonic Wars, having Brazil accommodate Portugal’s government at the time and forming it as a strong independent state in 1822 apart from Portugal. Order and Progress took hold apart from Portugal since then and ties have been cultural, but economically independent from the Iberian powers.

While LEX’s argument can be seen as rational from an economic standpoint, is it realistic to assume that any nation would be comfortable being absorbed by any other nation? The New Brasil example, while offensive to many Portuguese, might be a workable option if Portugal and Brazil had stronger cultural ties. As one of the other BRICs, Russia has always claimed cultural, and thus political pull in former Soviet states that were populated with ethnic Russians and form much of the political make up of Russia’s neighbours. India in a few years might be dominant over the UK economy and create a former colonial situation, but Britons rarely accept being seen as culturally European, nevermind Indian. China and Chinese people have communities all over Asia and much of the world, but it would not avoid a conflict in absorbing Taiwan, Singapore and we have yet to see how Hong Kong will respond to added challenges to its independence and democratic system in a major way by Beijing, but many smaller examples certainly exist and are of great concern to locals in Hong Kong. Another obvious point is why a BRIC would want to absorb a small European nation and its debt, most BRICs are not trying to expand their already large territories or population, and it is not seen as Manifest Destiny by anyone in Brazil to take over Portugal or anywhere in Europe. Not a great option I suppose if Brazilians and Portuguese are against it, even if it makes economic sense, or cents.