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underscored by increased military spending by Venezuela and its acquisition ofbillions of dollars’ worth of military hardware in recent years. 604On balance, Brazil’s relations with its neighbours entered a new phase as thecountry sought to become more proactive in defending its economic interests.During 2008, relations with Ecuador became strained over that country’s unilateraldecision to suspend debt repayments to Brazil. In addition, President Correaexpelled Odebrecht, a major Brazilian construction firm, from the country inOctober. Brazil’s strained relations with its neighbours were exacerbated byPresident Lugo of Paraguay’s challenging of the status of Paraguay’s debts to Brazil.To complicate matters, Brazil’s neighbours Venezuela, Bolivia and Chile hadcommenced upgrading their militaries.However, Brazil was not limited to its region, as in November 2009, PresidentMahmoud Ahmedinajad, in a highly controversial gesture, became the first Iranianpresident to visit Brazil. In March 2010, during a trip to Israel, Lula voiced hisopinion on the Middle East Peace Process, appearing to offer his services as afacilitator. And, to underscore the unwieldy growth of Brazilian diplomaticambitions even further, Lula facilitated, along with Turkey, a deal on procedures fora nuclear fuel swap with Iran. This move was greeted with disdain by the UnitedStates. 605In summary, during Lula’s second term, a palpable change occurred in Brazil’s foreignpolicy posture. While Brazil’s international activism proceeded apace, its regionalcontext became thornier, rendering the discourse and practice of internationalismmore difficult to implement. At the same time, the government seized theopportunity to seek to shore up Brazil’s international position by revisiting thecountry’s defence strategy and placing relations with its neighbours on a morecalculated footing. Domestically, the Workers’ Party had improved its positionconsiderably following the 2005 mensalão scandal, and was beginning to lookforward to the candidacy of Lula’s successor in the 2010 presidential election. Lula’s604 Reuters, “US concerned over Venezuela-Russia arms deal”, 14 September 2009.605 Parisa Hafezi, “Turkey, Brazil seal deal on Iran nuclear fuel swap”, Reuters. 16 May,2010. Accessed online at: http://www.reuters.com/article/2010/05/16/us-iran-nucleardeal-idUSTRE64F29P20100516on 6 September 2011.236