Brazil Policy Report

Brazil's Investment in Digital Infrastructure
Brazil, similar to Chile, increased its investments in digital infrastructure substantially in 2018 and 2019 and expanded its bilateral cooperation with China in this field. Two main areas of investment were expansions of digital services and the construction of broadband networks via fiber optic infrastructure. Due to its geographical structure, Brazil’s digital infrastructure faced challenges since its first national broadband networks. The distance between and uneven distribution of economic and societal hubs led to a concentration of digital architecture and competencies along the east coast, especially around the wider economic area of Rio de Janeiro. The underperformance of Brazil’s investments in ICT infrastructure can be partially attributed to these challenges. In addition, limited public resources for ICT investments, which in comparison to other countries in the region require larger scaled solutions, acted as a dampening factor for a rapid transformation towards new technologies.

Chinese Financial Offerings and Key Projects
For these reasons, China’s financial offerings in Brazil for digital infrastructure investments were a key force for the construction and realization of different projects. One of the most advertised infrastructure projects is the South Atlantic Inter Link (SAIL) fiber optic subsea cable, the first digital connection between Africa and South America. The structure and general project development provide key insights into the execution of such projects within a bilateral agreement between China and a South American country. The joint investment was led by China Unicom and its wholly-owned Brazilian subsidiary China Unciom do Brasil Telecomunicacoes Ltda. CamTel or Cameroon Telecommunications is the second project owner, a telecommunications company from the African side of the project, headquartered in Kribi. Financing was partially realized through a loan by the Chinese Export-Import Bank (US$85 million) and CamTel (US$34 million), which themselves received the necessary funds through financing by China Unicom.[1] Huawei’s subsidiary, Huawei Marine Networks, was contracted to plan, manufacture, and install the subsea cable and necessary digital infrastructure between the two continents. Another important Chinese entity in Brazil is China Telecom, the second largest network operator in China. China Telecom Americas provides network solutions across North and South America. The subsidiary has built network infrastructure along the entire South American coastline, ranging from Buenos Aires through Panama, Mexico, the East and West coast of the USA to Canada.

Policy Development and Cybersecurity
Policy development in Brazil related to digital technologies started later compared to other South American countries. The General Data Protection Act (Lei Geral de Proteção de Dados) was passed in 2018 and formed a robust policy framework around data flow, privacy protection, and user rights.[2] The framework is similar to European privacy and general user rights frameworks, such as the European General Data Protection Regulation (GDPR). Data processing without user consent and ownership of personal data are two key areas that the law protects. Despite its robust appearance, the institutional structure to support and execute these policies is insufficient. Policies related to cybercrime mimic these institutional deficiencies and are often described by scholars of Brazilian cybersecurity as weak and inefficient.[3] In comparison to Chile, Brazil’s approach to digital governance, cybersecurity, and regulation of digital infrastructure lacks structure, an institutional foundation, and homogeneity.

Dependence on Chinese Entities
In summary, Brazil showed during the analysis of available data a high reliance and dependency on Chinese entities for planning, implementation, operation, and support of digital infrastructure. A conglomerate of different Chinese actors often realizes single infrastructure projects that supply hardware and software solutions to Brazilian state and non-state entities. Digital policies, however, show different dependencies. There is no indication of dependencies on Chinese actors during policy development. Moreover, Brazil’s digital policy initiatives during the measurement period were more closely related to European frameworks than to its Chinese counterparts.