Since there have been a number of events worthy of attention recently, instead of focusing on a single theme I would
like to take a brief look at several topics.
Who Killed Sérgio Vieira de Mello?
Well, George Bush of course, according to many aggrieved Brazilians. The logic behind this idea is that if the U.S.,
with its British lackeys, had not invaded Iraq and ousted Saddam Hussein, Brazil's best-known diplomatic troubleshooter,
Vieira de Mello, would not have gone to Baghdad and been killed.
The terrorists who actually bombed the U.N. headquarters, killing more than 20 people and maiming scores of
others, were not really to blame. They were just a symptom and Bush was the real murderer. The anti-American bias, which
appeared within moments of the blast on Tuesday was, sadly, predictable.
For example, while the events were being aired live on TV, a man speaking on behalf of the Vieira de Mello family
in Rio de Janeiro told a Brazilian TV station that Vieira de Mello had died because Bush had "sent" him to Baghdad. This
attitude is as absurd as that of the terrorists who attacked the U.N. as though it were an arm of the United States, instead of
the representative body of the world community.
Vieira de Mello was not "sent" by Bush, but asked to take over following his successful track record in East Timor
and other places. He could have turned down the offer had he wished.
Reuters news agency quoted Paulo Delgado, the Workers' Party foreign affairs spokesman, as praising Vieira de
Mello for "standing up" to the U.S. "He took a firm position with the United States, demanding that they reestablish water and
electricity in Iraq. He said deploying tanks in Iraq was like rolling tanks into Copacabana," was Delgado's barbed comment.
Here are a couple of excerpts from O Estado de S.
Paulo newspaper on the day following the attack: "While we
were looking after out own affairs... Sérgio Vieira de Mello was in the midst of the inferno which Baghdad has been
transformed into since this disastrous investment by Mr. Bush and his hawks..", "The (U.N.) employees, by being in the wrong place
at the wrong time.. are the innocent victims of the megalomaniac madness of George W. Bush."
One correspondent for the Folha de S.
Paulo daily, playing the role of Grand Inquisitor by asking and answering his
own questions, had this to say: "No one is asking the most important questionwhy did this tragedy happen? The answer is
simplebecause the Iraq War should not have taken place." Oh really?
The anti-Americanism was also apparent in
Folha's news coverage. On Thursday it carried a front-page teaser and
inside page lead story headlined: "Annan criticizes coalition for lack of security". According to the
Folha reporter in New York, U.N. Secretary-General Kofi Annan had made a "hard hitting and unusual" criticism of the U.S. and U.K. over the
attacks. The headline and introduction were based on this quote: "We had hoped that by now, the coalition forces would have
secured the environment for us to be able to carry on... economic reconstruction and institution building. That has not happened."
The remarks, which Annan made in Stockholm, were not nearly as hard hitting as the paper made them appear, and
the story was founded on such a weak base that by the third paragraph, the paper reported that by the time Annan reached
New York, he had toned down his comments.
Most other agencies used as their news angle Annan's announcement in Stockholm that the U.N. would remain in
Iraq despite the bombing. It was also apparent from other comments he made that the U.N. Secretary-General himself had no
idea of the security situation on the ground. I contacted
Folha to try and find out why they had used this particular angle but,
at the time of writing, have had no reply.
Lula Puts His Faith in the U.N.
According to this same newspaper, President Luiz Inácio Lula da Silva will pay a tribute to Vieira de Mello on
September 21 at the opening of the U.N. General Assembly in New York, in which he will condemn the war in Iraq. Let us hope
Lula sticks to a tribute and keeps his thoughts on Iraq to himself. However, this is unlikely since he was quoted as telling
foreign correspondents in Brasília that the U.S. troops should be pulled out and replaced by U.N. troops, as though that would
Is the Central Bank Playing Politics?
The Central Bank has just reduced base interest rates by a whopping 2.5 percent, to 22 percent. This is still
extremely high, but a significant cut from the rate of 26.5 percent just three months ago. The reduction had been expected. Not a
single analyst forecast that the base rate would remain the same or be increased. One prominent former Central Bank director
was even advocating a cut of 4 percent.
As usual, the government will be a major beneficiary of the rate cut. Depending on whose numbers we consider,
the government should save between R$ 8.7 and R$ 11.1 billion (between US$ 2.9 and US $3.7 billion) in interest
payments alone. The lower estimate is in several media outlets, and the higher one comes from an economic consultancy quoted
by the government itself.
The rate cut comes at a critical moment, with the country technically in a recession. Household income is about 16
percent lower than a year ago, retail sales are about 5 percent lower on an annual basis, and the official unemployment rate is
almost 13 percent. The Central Bank justified the cut on the grounds that inflation trends were on target. I am no economist, so
cannot comment on these reasons, but I would not be surprised if the Central Bank had not taken into account the almost
unbearable pressure which has been imposed on it by all sectors of society.
We have already pointed out that the current head of the Central Bank, Henrique Meirelles, is a man with political
ambitions. He was elected a Congressman for the PSDB in last year's elections, but had to resign his seat almost immediately,
when he was offered the Central Bank job by Lula. His background is in commercial banking, and although he did a splendid
job for BankBoston in Brazil, that did not make him the ideal man to replace the outgoing Central Bank boss Armínio
Fraga. As we wrote at that time: "the new Central Bank boss has virtually no experience in the political arena, and could easily
be swayed by (Finance Minister) Palocci, technically the person he reports to, and Lula."
The COPOM, or Monetary Policy Committee meeting minutes to be published soon are unlikely to mention the
political and business pressure, but what a pity the meeting could not have been featured on TV reality shows which have
become so popular of late. Then we would really know what went on behind the closed doors of the Central Bank.
Little Boy No Longer Lost
The British satirical magazine Private
Eye used to end particularly nauseating items with a note from the editor
saying "pass the sick bag, Alice". I felt like calling for Alice this week after witnessing the transfer of Anthony Garotinho from
the PSB to the PMDB party. PMDB President Michel Temer received a rose from Garotinho, and around a dozen defecting
hangers-on _ including Garotinho's wife and current Rio de Janeiro state Governor, Rosinha.
Little Boy Garotinho has just left the PSB, on whose platform he stood as a presidential candidate last year. He
did surprisingly well on a simplistic platform, appealing to the lesser-educated members of society, ending in third place.
With the transfers, the PMDB will now have 80 sitting members, which makes it the second largest party grouping in the
Lower House of Congress. This will give it more weight in negotiations for cabinet positions when Lula reshuffles his
ministers, as he is expected to do at the end of the year.
Being part of the PMDB, an uneasy coalition of disparate interests with no national leader, will also give Garotinho
a base for a future new stab at the presidency. Garotinho made no bones about ditching the supposedly Socialist PSB"I
was never a radical. I am Garotinho peace and love" he said, echoing Lula's unofficial election slogan. Garotinho, who is
still Security Secretary for Rio de Janeiro, is also expected to use his influence to try and improve relations between his
governor-wife and the federal government.
Following his (fairly) successful handling of the pension reform first round vote last week, Lula is finding his next
reform prioritytax reformto be, shall we say, a bit more taxing. A Congressional committee was due to vote on the issue
last Thursday, but delayed the vote amid cat calling and shouting matches, which would have led any schoolteacher to grab
the culprits by the ears and march them into the corridor.
By Friday, a deal of sorts had been cut, but it is far from complete and was only reached when the government
agreed to consider further amendments next week. Among the aims of these reforms are standardizing the ICMS value-added
tax in hopes of ending the tax incentives war between state administrations, and making the temporary and controversial
CPMF tax, charged on every financial transactionchecks written by individuals for examplea permanent levy.
For the man on the street, all this talk is practically academic since taxes in Brazil will not be cut by a single centavo
with the reform. In fact, the tax load will probably increase, since the government is considering raising taxes on earthly
pleasures like alcohol and adding to posthumous misery by raising duties charged on inheritances.
Space Ambitions Must Continue
Finally, the terrible accident at the Alcântara base on Friday that caused the deaths of 21 people when part of a
satellite launcher exploded, was a setback for Brazil's ambitions to be a pioneer of space. It is the third time in recent years that
a space mission has been struck by disaster, although it was the first involving fatalities.
However, virtually every other country that has entered the space race has suffered similar setbacks, although the
death toll here is probably the highest ever. It was correct of President Lula to state immediately, in his message of
condolences to the families of the victims, that the space program would continue. Brazil has played a pioneering role in
aviationfrom the days of Santos Dumont, and his famous plane "14 Bis", which took to the air in Paris in 1906, to today's Embraer,
one of the world's top regional jet manufacturers.
Not only is aviation important in terms of defense and as a means of communication in such a huge country, but by
exporting added value, high-tech products like sophisticated aircraft, Brazil is showing that it does not only depend on
low-priced commodities and raw materials like coffee and iron ore.
John Fitzpatrick is a Scottish journalist who first visited Brazil in 1987 and has lived in São Paulo since 1995.
He writes on politics and finance and runs his own company, Celtic Comunicações
www.celt.com.br, which specializes in editorial and translation services for Brazilian and foreign clients. You can reach him at
© John Fitzpatrick 2003
This article appeared originally in
Infobrazil, at www.infobrazil.com