Focus on Latin America: Brazil at a Crossroads (Part Two)

Two separate piles of BRICs? Is that where we’re headed?

Recent events should make us wonder. One the one hand lie China and Russia. Both countries in the last year have enacted statutes prohibiting the bribing of overseas officials. Skeptics will argue that these are but paper laws, unlikely to be enforced any time soon. But let’s remember that the U.S. took no less than 25 years to really begin enforcing the FCPA. China and Russia have set themselves on a similar course; we’ll likely see enforcement progress in the coming years.

India, at the moment, finds itself in the “other” pile. Despite broad-based support for corruption reforms and a much-publicized Gandhian hunger strike, its once-promising corruption bill now languishes in parliament. Bogged down in politics and procedure, onlookers wonder whether the Indian government can ever get its act together and improve the country’s business environment. India’s status as a prospective global leader suffers badly in the process.

Whither Brazil? Will it follow China and Russia, or flounder with India? As I explained in the last post, a critical vote on its anti-corruption bill — the Clean Company Act — is scheduled for May 23. An affirmative vote will signal to the world that Brazil aspires to exert real leadership in Latin America and beyond; that it wishes to build a legal system as promising as its economy; that it can be trusted by foreign investors and foreign governments alike; that it will join China and Russia as developing countries whose governments possess both the vision and the capacity to get these laws passed.

But failure to advance the bill will send a very different signal: that its business environment remains high-risk; that its elites tolerate and probably sanction bribery; that its government would rather exploit an unlevel playing field than help make it level; that its legal system may be more prone to entropy than to progress.

Whatever Brazil decides, upcoming events will broadcast its decision to the world. We’ll all know, without a doubt, which course Brazil took. How? We’ll discuss next post.

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Andy Spalding is a contributing editor of the FCPA Blog. He teaches international business law at the Chicago-Kent College of Law. Effective June 1, he’ll be an Assistant Professor at the University of Richmond School of Law.