AFP - Brazil may be one of the hottest emerging economies now but its ambition of becoming a big international political power is falling short, a business conference on Latin America's largest economy heard here Wednesday.

"Brazil is not yet ready to bite the bullet to become a regional and international leader," Jorge Castaneda, a former Mexican foreign minister and now professor of Latin American studies at New York University, told the event organized by Britain's The Economist magazine.

He and other featured speakers, including former Colombian president Cesar Gaviria and Ricardo Lopez Murphy, an Argentine economist and head of the Civic Republican Foundation in his country, agreed that Brazil's non-confrontational stance was undermining its diplomatic influence.

That was clearest in Honduras, where Brazil has effectively given political refuge to ousted President Manuel Zelaya, who has been holed up in its Tegucigalpa embassy for over a month.

Brazil "missed a fantastic opportunity" to boost its credentials in Latin America by failing to broker a solution to the four-month dispute in Honduras, Castaneda said.

Gaviria also questioned Brazil's efforts to promote the South American trade bloc Mercosur -- saying "Mercosur is not a good instrument to do anything in the future" -- and the fledgling Unasur regional forum designed to thrash out common security issues.

"What are the threats to South America? There are no threats at all," he stated, adding that opposition by Brazil and other South American nations to a US deal to use Colombian military bases was predicated on "totally artificial" premises.

At the root of many of the current problems in South America was Venezuelan President Hugo Chavez, whom the panel accused of being undemocratic and increasingly autocratic. Brazil and other countries were coddling him when they should be confronting him, it said.

"I don't think we are up to the challenge of Chavez and other autocratic governments. We are ignoring them," Lopez Murphy said.

In terms of Brazil's longstanding push to be given a permanent seat on a reformed UN Security Council, Castaneda expressed skepticism, saying that "is not going to happen."

Economically, though, there was no doubting that Brazil was currently experiencing its best performance in its history, buoyed by continued demand, especially from China, for its abundant commodities, and more responsible macroeconomic policies, the conference heard.

Robin Bew, global editorial director and chief economist for the Economist Intelligence Unit subsidiary of The Economist, said President Luiz Inacio Lula da Silva "has been very lucky."

By continuing the more rigorous policies set by previous governments, Lula oversaw an expansion of Brazil's economy that easily weathered the global financial crisis and is now the darling of international investors, he said.

When Lula bows out at the end of 2010 after serving his maximum two terms, the course for deepening the country's economic success will already be set for whoever takes over, Bow predicted.

"A change at the top won't derail it," he said.

Still, it remained to be seen whether corporate Brazil could turn its domestic triumph into a launching pad for international expansion.

Xiang Bing, the dean of Beijing's Cheung Kong Graduate School of Business, told the conference that Chinese companies were already going down that path.

"There are unprecedented opportunities for Chinese companies to go abroad," with expansion fueled not only by big cash reserves but also a national entrepreneurial spirit, he said.

Xiang forecast that Chinese firms over the next four to five years would steadily march into other markets, even buying up top brands. "Equity participation, strategic alliances -- that is the way to play the global game," he said.