Interview with Professor Renato Galvão Flôres Jr.

13. November 2017

Professor Renato Galvão Flôres Jr. is a special aide to the President of Fundação Getulio Vargas (FGV) – one of EPF’s founding members – and Director of the International Intelligence Unit, FGV/IIU, which generates intelligence on international issues relevant to Brazil and also manages specific international institutional partnerships of FGV. A specialist in international political economy, Professor Flôres has significantly contributed to the Asian dimension of FGV activities.

In this interview, Professor Flôres gives insights into his work at FGV, particularly at the International Intelligence Unit, which he is heading, and his projects within the EPF. Furthermore, Professor Flôres elaborates on the work of the T20 this year and his expectations for the upcoming Argentinian G20 presidency.

How did FGV contribute so far to Brazil’s and global sustainable economic development?
 FGV, as a huge private foundation, quite diversified in the area of social sciences and public administration, acts in many dimensions, as regards sustainable development. I can cite a few:

i) at our business school in São Paulo – EAESP, we have a centre specifically targeted to develop sustainable solutions to agents at the micro-level, like small and medium enterprises, municipalities and specific communities;

ii) our two law schools – Direito Rio (Rio de Janeiro) and FGV Direito (São Paulo) – have quite a few projects and study groups on legislation on sustainability and legal aspects of social interactions related to sustainable measures;

iii) the International Intelligence Unit itself has a sizeable share of its activities dedicated to different aspects of sustainable development, aiming at the generation of innovative global ideas that could be widely useful;

iv) research on energy, which is spread all over FGV, has, in most cases, a strong interest in renewables and the sustainability concept;

v) many professors, researchers and professionals from all our units frequently attend international and domestic seminars on sustainability, either presenting or bringing to the Foundation new ideas and practices on the subject.

What are the main tasks and capacities of the International Intelligence Unit of FGV which you are heading?

FGV/IIU acts like a window from FGV to the world. As said, we concentrate on international issues and problems that are relevant to the Brazilian society and, on the other hand, try to help institutions, businesses and constituencies abroad, with a strong interest in Brazil, to understand better the country and optimally focus their strategies.

At present, FGV/IIU has a portfolio of projects dealing with i) renewables in South America and how to integrate the related manufacturing activities into regional value chains; ii) the COP debate and ways to improve abatement measures, with special emphasis on bottom-up approaches; iii) common cybersecurity principles for the BRICS countries; iv) the future of sea trade lanes and its impact on Brazilian commercial interests; v) energy integration in South America; vi) comparing the Brazilian and the German energy matrices under the Energiewende process (energy transition); vii) a more open framework for trade in services in Brazil, with special emphasis on insurance services; viii) using a regional Input-Output matrix to gauge the possibilities of further integration among the South American economies; ix) Global Governance from a BRICS perspective.

Well, this looks already like a very ambitious agenda and we are doing our best, with the limited staff we have, to cope with all those issues.

You are currently finalizing a joint EPF-FGV study on global value chains in the renewable energy sector as a tool for regional integration in South America.  Which results of this study can help also other emerging economies to pave the way for regional integration?

This study was very challenging! We launched and discussed the idea in two EPF/EMSD seminars, one in Beijing and another one in Cape Town. Luckily, the group “bought the idea” and we got the funds to develop it. The final results are varied, and I invite everybody to at least peruse the  , which has been available since December last year, however, three conclusions are conspicuous in the line of the question:

i.) renewables manufacturing is dominated by a few European countries, India, China and the US; there is no incentive as yet for other regions to incorporate this technology, particularly in a regional mode. This is unfortunate, and goes against our original expectations, but is a relevant finding in the way that it saves time in trying to push for unfeasible things and in calling attention to the fact that once one wants to try such an endeavour, though not impossible, it will certainly be an uphill climb;

ii.) the above also implies that institutional aid is mandatory for achieving significant results. Planning the power system jointly with the industrial development policies can also help in creating an enabling environment for such attempts, something that a more liberal rhetoric often disregards;

iii.) in spite of the previous remarks, there are many parts and components that could be regionalised. Think of a wind tower: though the core and the transforming devices could start being imported, huge concrete structures and other supporting pieces could be locally produced, to begin with.

The combination of the points above shows that a regional value chain for renewables in South America – and probably other emerging countries – is possible, though still distant. The value chain would be an international public good that requires concerted intervention from all the countries involved – suppliers as well as users of the renewables technologies.

This research has been conducted under the EMSD/EPF umbrella – how was the network able to contribute to this and other research projects of FGV?

I believe the starting sessions when we discussed the projects to have been rather valuable. The network has a plus in calling attention to other similar experiences pursued elsewhere and in its constant effort to bring on board new partners or counterpoints. The goodwill, and the open and friendly minds of the co-ordinators are also very stimulating.

Notwithstanding, including communalities in different agendas, usually subject to specific pressures and interests, beyond not easy, does not imply that common pursuits will ensue. Incentives, as regards the governance of a multi-party endeavour are not always clear, making that the final output may result in a mixed success, with part of the original team quitting the project.

As a suggestion, perhaps these networks, beyond their outstanding managing staff – who double themselves not a few times as technical experts and referees –, should have a content committee, fully dedicated to checking the substantive development of the projects and, most crucially, caring for the maintenance and improvement of the partnerships, as regards content sharing and, in a later stage, eventually merging or harmonising results.

The greatest problem I’ve been facing – and, I believe, other network members too – is continuation of the commitments fixed either in the meetings or, later, through invitations. More formal ways of establishing the partnerships would be helpful, and a kind of annual or thematic meetings -chaired by the content committee- with all members sharing the same interests or common geographic groupings could also be of value.

You attended the EPF Think Week in Beijing in October/November 2016, chairing the working session on societal aspects of the digital economy – which insights did you find the most interesting in the discussion?

I purposively stimulated debate and controversy, as visions of the digital economy tend to concentrate either on the (in principle) positive outcomes from a digital world or on lambasting the fake vision of more (digital) freedom and transparency, when more control and concentration is the rule of such brave new world.

Reactions, broadly, followed the two lines above, with more specialized speakers nearly blindly supporting their own, specific activities. However, the more interesting thing that emerged, in my view, was the age divide as regards the general way to face these questions. The younger generation many times departed from assumptions that were not at all granted by the … “less young” ones. “Hidden assumptions” included key living patterns, a less and more conscious consumption, greater care in reducing carbon footprints, things that – as one participant said – were considered a settled acquis of the Rio 1992 Conference generation. This, in my view, provoked a subtle incongruence in the panel, perhaps not perceived by all the participants.

The youngsters addressed the societal aspects of the digital economy from within the digital world, debating measures, policies and approaches from a standpoint that not only accepted most existing digital realities, but rather took them for granted. The older ones tried to accommodate the digital practices and novelties in a society anchored in precisely the Rio or classical views of sustainable development. No bridges between the two positions were effectively (neither perceived nor) proposed.

It was an unexpected experience which made me rethink my key points on the theme of the panel and reconsider my views in terms of a social reality that encompasses not only more or less ecological visions, more or less free market views, and so forth, but also much more – or considerably less – incorporation of the digital environment surrounding us all.

In May this year, you attended the Think 20 Summit in Berlin and the workshops organised by EPF on sustainable infrastructure and digitalisation. How does the T20 process under the German G20 presidency compare to previous years, in China and Turkey in particular? How could the T20 process be improved and what role could/should EPF play in this regard?

I’ve been following the G20 for the past 5 years, the 3 last ones also through the T20 meetings. To be frank, I´m afraid the G20 somewhat lost its track, what is fairly understandable in the case of ambitious international organisations (or gatherings). From its clear, key and well-defined goals of streamlining the international financial system, reducing or curbing its wildest practices and improving the transparency (and sustainable side) of the system, it has evolved into a one-size-fits-all group, tackling from gender issues to infrastructure financing in Africa. I’m afraid this is a bit too much.

Meanwhile, many ideas and stances, in the midst of this confusing agenda, were captured by the very financial system which, each year, controls more the functioning and direction of decision making in the Group.

The Chinese tried to revert – at least partially – this trend, bringing back a strong hand in the conduct of themes, committees and approaches. They have been perhaps more than half successful. There is an expectation that Germany, with its pragmatic and extremely operational approaches, and its conservative credentials, will pursue contributing to overcome the nefarious trend above. From the May outcome of the T20 effort however, one remains with mixed feelings.

The meeting was too big, confusing and even lavish, something doubtful in terms of sending a positive image. In spite of all the evident efforts by the coordinating team, it essentially stood as a (continental) European meeting, slightly patronising, all other members and regions lacking either representativeness (particularly in the panels) or voice. To choose sustainability as the guiding principle, besides the basic financial task, is fine, but the recent US moves have for sure disturbed the plans.

The overall impression is that not only the G20, but the T20 as well need a serious rethinking.

In 2017, Argentina will take over the G20 presidency from Germany and become the first Latin American country to host the G20 summit. What are your expectations regarding this presidency?

The Argentinian presidency can only be approached within the above context. If Germany moves on to restore the G20 to its original purposes and recovered credibility, though within a modern framework, what now seems unlikely, Argentina could also adopt this positive line. If however Germany fails, I wonder whether Argentina would have the capacity to advance this most needed task.

Moreover, the funds the country will allocate to the presidency will in no way match those Germany supplied this year, making for much more modest and restrict goals.

A complementary rhetoric surrounding the Argentinian presidency is that this would make for a “Latin G20”, be it due to its location or the fact that Argentina, together with her two other partners in the Group – Brazil and Mexico –, would mobilise Latin American countries and open more room for them in the 2018meeting. I am a bit sceptical on this, though it may create interesting opportunities for EMSD to increase its visibility and actions in Latin America, through satellite meetings – not necessarily linked to T20 ones – and well targeted projects.

Indeed, as regards the German presidency, and some sort of continuation of the present T20 efforts, I’d suggest that EPF/EMSD have a much more active role than the two institutes which took care of T20, something that may avoid some of the mistakes evident in May (T20 Global Solutions Summit, 29-30 May 2017), in Berlin.

What is your wish list for EPF’s future work and its cooperation with FGV?

Our co-operation is broad and diversified, which is one of the advantages of the great autonomy schools, centres and think tanks enjoy in the FGV planet.

First of all, I hope these multiple interactions will continue, addressing different subjects, from different viewpoints.

Speaking for my unit, FGV/IIU, my wish list includes possible follow ups to two of our recent projects.

One is a deeper view of distributed energy systems and their social economic impact in a South American region with ever increasing use of renewables. Pursuing the ways and means of creating productive associations in the power generation sector in the region is something which still bears several questions.

The COP results, the new UN sustainable development indicators and the recent US positions are a Pandora box of problems and issues. I would like to explore several dimensions of it. One is the costs and impacts of some of them, in countries like Brazil or Nigeria – a good couple for drawing contrasts and comparisons –, the second is the feasibility side. A third one – and drawing on an interesting meeting on the oceans, held during the May T20 – is the role of oceans for sustainable policies in Brazil.

We´ve pledged in one of our projects for more bottom up approaches in the climate and sustainability debate, together with less reliance on (many times sophisticated) financial artefacts and products. This has already raised the interest of a few German industries and university departments. At the same time, many colleagues continue to dedicate efforts to the latter, together with too much faith in the broad treaty agreements; we would like to discuss this more, within select case studies. Aren´t we refusing to see constructs and solutions that are unfeasible?

Also, the 2016 Beijing Think Week introduced the challenges brought by the digital economy; how to couple them with the discussion above?

Finally, from a regional perspective, I would like that the efforts and investment made with the purpose of having a line of BRICS-focussed projects would not be discontinued.


EPF | Economic Policy Forum

EPF | Economic Policy Forum