Back in December 2005, Presidents Hugo Chávez and Lula laid the cornerstone for the Abreu e Lima Refinery Complex in the Brazilian state of Pernambuco. The refinery was a $2.5 billion project, co-owned by PDVSA and Petrobras, and at the time both countries were booming. Brazil was selling large amounts of its commodities to China at an outrageous price, which helped sustain the expansion of the economy. Riding the wave of the commodity boom, Lula would frequently boast that growth rates like these were “unseen” in Brazil until then.

Then, in 2008, the US housing market went bust. Lula actually said it was going to be “uma marolinha” – a…