Brazzil

I’m quite happy Lula agreed to honor the IMF loan and hope that he continues to do so - the country is far more stable today than it has ever been (using the political and economic scaffolding that Cardoso constructed). Only recently, article after article is being written about Brasil´s prosperity, new records in exports, new jobs, a growing middle class and a much more vibrant economy (hard power) etc. Brasil is also being praised for her international leadership: G22, Haiti, Battling hunger (soft power). The debt will eventually be paid down (especially if we can further crack down on corruption, cronyism, unnecessary and costly officialdom that does far more harm to our economy and development than any outside force ever could) THEN Brasil will not only have more sovereignty over it’s own economy, but it will have earned even more of world’s trust and respect.

>>>>Many are hoping that when this agreement expires, in 2005, Brazilians will regain control of their battered economy if Lula refuses to sign a new agreement.

This type of attitude scares the hell out of me. If there is any suggestion that this will take place in the future, I’ll sell everything and flee. Beware of what you ask for (but then again it’s all nice and easy to scream “ REVOLUTION” for a country you don’t live in). Look to Argentina to see the affects of reneging on a debt. Why were they in such dire straights to begin with? CORRUPTION. Argentina went from being the Paris of Latin America; to being just one more violent, impoverished 3rd world country lumped in with the rest – literally over night.

After years of building up our soft power in the international arena (as well as a stable economy – not perfect, but better than we’ve seen in decades), would you really like us to toss all that away, and race back to the days of being just ONE more shaky Banana republic on the verge of collapse?

By the way, nice math skills:
>>>>>>>>>>.300 billion reais (US$ 111 million)
ROFL

Well let me first respond to the post made above by ROFL.

First of all, let me state that I did not put 111 million dollars, that was done by the editor. I am sure everybody knows that it was suppose to be billions not millions.
Besides that, your statement that I am screaming, "revolution" is just not true. Yes, many on the Left scream for a social revolution, but I am not one of those. I am person who actually believes in capitalism, I just dont agree that the state of the Brazilian economy is anywhere near the level. And personally, I look at the figures of the Cardoso administration to see that. Look at where the tax level was when Cardoso took office? It was at 24 %, then it went up to 36% some claim even higher near 40 percent. Where is the money going to? Higher taxes kill jobs! The policy of excessive low inflation rates is something else that Brazil must complete. And I agree that indexation of wages to inflation was wrong and a major mistake. You cant run your economy because doing indexation in that way is crazy and will lead to hyperinflation. Also very low interest rates is crazy, because it creates too much influx of money in the economy creating inflation. So, I believe that during the 60's and 70 boom of the Brazilian economy the authorities never tightened their interest rates enough to keep a lid inflation. Eventually external things happened and well you know the story.
Lower taxes are good, I am actually attacking IMF from a true believer in capitalism. They promote bad economic policy. Trust me, Republicans hate them as much as liberal democrats. Capitalism, is just not as vibrant as it should be and Cardoso did nothing to change that. Look at the bureaucracy! Nothing changed. Growth, average below 3 percent just like the 1980's Lost Decade. I am sorry, if you think that it is better to grow below 3 percent and call it stable fine but Brazilians deserve better and it can happen. Once you stop listening to stupid people like Palocci, Malan and Delfim Netto who talk about reducing taxes and suddosedly care about the economy. They dont do none of this, but maintain the control. Tax cuts stimulate growth and actually creates more revenue for the government but see the IMF and the international speculators only care about Brazil's budget deficit and what not! They panic to hear that Brazilians are cutting taxes in a major way to stimulate the economy or that Brazil will lower rates against trying to hit very low targets. But is it fair that India's economy grows rapidly but it has a budget deficit of almost 9 percent. No one fears them defaulting. They have lower taxes and more growth than Brazil.

Second main point I want to make is about the terms you used refering to the economy. I will give you credit that the economy is stable. But what is stability all about? About keeping things the same and not messing up (like Argentina right?) But stability is also hurting Brazil's ability to take risks (like cutting taxes) to stimulate more growth and make the economy more vibrant. The Chinese dont have a stable economy, they have a vibrant economy that is creating jobs. It is an agreessive economy, that is expanding leaps and bounds. It some senses it is less stable than the Brazilian economy, but it is growing so much faster. .
Brazil needs a stronger, more vibrant economy, not stability.
Plus, the figures of the Brazilian economy are not sutabile for stability. 40 million Brazilians live in some sort of poverty. Ownership of land is one of the most inequal in the world. Their needs to be a more rapid land reform, stability is not going to change things. I think change is needed, I am progressive. Brazil's economy needs lower taxes and to control spending on its bureaucracy (never done by Cardoso or Lula). But in order to reduce the budget deficit, interest rates need to come down. If they dont the cycle of more debt will continue. Corruption exists in every country around the world, especially in countries with huge bureaucracies.

Here's a key point, the IMF talks about the US economy, but no one cares about their opinion. Bush, listens to his advisors not the IMF. They lower interest rates and cut taxes when the economy weakens, explain to me why this does not happen in Brazil or in most Latin American economies when their is an economic downturn? Dont say corruption because thats too simple. Corruption exists in Chile, but they are a more vibrant economy.

Next thing, did you admit to me that if Brazilians took control of their economy that you would sell everything and leave! So does that mean that today, Brazilians have lost some control of their economy? Is that right or did I read in too much into it?

In my conclusion let me state a few things. I am realist, not a marxist and I think liberal (and neoliberals) are wrong on almost everything. Thats my viewpoint and I will express it
But I have one favor to ask. Your attacks of my opinion of my articles are welcoming.
But please do me one huge favor, dont attack because I dont live in Brazil. I left at the age of 5, with my family. I did not have a say in where I lived for the past 15 years of my life. I love my country and I will express my opinion whenever I see problems. I am not one of those Brazilians who leave their country and avoid their heritage and cultural. I visit Brazil every chance I get and I plan to make my life their in the near future. Thanks.

Finally, Lula has done the right thing by making sure the Brazilian economy can survive without the supposed stability of the IMF!

I think you don´t understand what is happening. Brasil isn´t renewing the latest 40 billion dollar accord. They don´t need to draw any more money from it. It has nothing to do with Brazil severing ties altogether with the IMF. There is still the question of about 300,000,000 dollars outstanding.

But I forgot to add. It´s still a great sign.

Of course Brazil is not renewing its latest accord, but people cant just stop talking to the IMF when you owe the most amoung of debt in the developing world! Brazil owes some 300 billion dollars, almost 1 trillion reais. But you must admit that an economy without the assitance of the IMF is an economy that is less dependent which makes it a stronger economy, one which is finally able to walk "on his own two feet".

There is no such thing as economic sovereignty in this day and age. If it were not for foreign investment and the IMF the Brazilian economy would have collapsed. Plus Lula's desire to strengthen the REAL to the dollar has done little to help the value of Brazilian exports.

There is no such thing as economic sovereignty in this day and age.

This is something that Brazil can´t seem to grasp. They want it both ways. First they want to take advantage of all that Globalization has to offer (look at all the deals with China - Café Pelé anyone? Christ, the Chinese are now making Brazilian Jets! Let´s move more of our infrastructure over into RED CHINA and keep O povo Brasiliero unemployed), yet, they LOVE to scream "economic sovereignty" whenever the nationalists or mind numbed povo are in earshot. Sure they´ll borrow billions, but heaven forbid anyone should suggest a more responsible way of spending it, or the terms of how it´s to be paid back.

You've already lost your country. First, the US bankers bought out all you debt paper and resold it to the Communist Red Chinese. Now the ChiComs are taking possession. At the same time, Russia, who would have ever imagined it, are making nice with Lula (as is Castro).

Nationalism might actually be a good thing.