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 No-one could accuse Brazil's President Luiz Inácio Lula da Silva of being greedy for power. When he was elected to his first term of office he suggested delaying the transfer ceremony for almost a week because the official date, January 1, 2002, was a public holiday. This year, he was duly sworn in, addressed Congress and a crowd of supporters, carried out some official duties in the following four days then went off on holiday for 10 days without forming a new government.
Since Lula himself has made it clear that he wants to see GDP grow by 5% a year - an ambitious aim by Brazilian standards - voters might have expected him to set an example by acting urgently and decisively. The country is now awaiting his return to find out his plans for the next four years. The governors of all Brazil's states assumed office on the same day as Lula but none went off to the beach. Instead they immediately began taking decisions, generally related to budgets. By going off like this, Lula is missing an opportunity to use the strong position he is in following his impressive victory in October when he gained just over 60% of the popular vote. He is also jeopardizing the solid-looking base he has formed in Congress headed by his own Workers Party (PT) and the PMDB, Brazil's largest political party, plus some other smaller parties. This alliance is already showing signs of strain as two candidates, who are supposed to be allies, contest the chairmanship of the House of Representatives. Lula favors the current chairman, Aldo Rebelo, from Brazil's minuscule Communist Party, over Arlindo Chinaglia, the leader of the PT group in the House. Neither candidate has shown any sign of standing down and there are now signs that a third candidate from the PMDB might be put forward to complicate matters further. This issue will have to be resolved before the new Congressional session starts on February 1. In the meantime, we are also waiting to see the measures Lula proposes to bring about the 5% economic growth he is set on. Many of these measures, affecting areas such as taxation, the public service pension system, the minimum wage and infrastructure proposals, will need congressional approval. Whether these measures, known as the Program for Accelerated Growth (PAC), will amount to much is another matter. The PAC appeared virtually from nowhere and is far from being a program in the accepted sense of the word. A search of the main government site and that of the House of Representatives shows no trace of it. The finance minister, Guido Mantega, is also on holiday so there is no one at senior executive level coordinating it. Mantega said the PAC would be launched officially between January 15 and 20 and would focus on investments in infrastructure, with participation by the public and private sectors. This sounds remarkably similar to the Public and Private Service Partnership (PPS) which was launched during Lula's first term as a means of modernizing Brazil's ailing infrastructure. So far, the results have been modest. Brazil's modern history has been marked by instant plans and programs to set the economy right. As journalist Marco Antonio Rocha pointed out in a recent article¹, these included Kubitschek's Goals Plan in the 50s, the various plans of the military government which produced an astronomic debt and sky-high inflation, the Sarney plans which made Brazil look ridiculous in the eyes of the foreign financial community, and those of Collor which hit the middle class and small businesses by confiscating their bank accounts. The only plan which really worked was the Real Plan of 1994 which Rocha claims was not really a "plan" but an ingenious way of ending inflation. Ironically, unlike Lula, the president who introduced the Real Plan, Itamar Franco, was politically weak yet the plan worked and its originator, the then finance minister, Fernando Henrique Cardoso, was later rewarded by a grateful nation, which elected him to the presidency on two occasions. ¹"Dois ectoplasmas invadem a imprensa" by Marco Antonio Rocha, "Estado de S. Paulo", January 8, 2007. John Fitzpatrick is a Scottish writer and consultant with long experience of Brazil. He is based in São Paulo and runs his own company Celtic Comunicações. This article originally appeared on his site www.brazilpoliticalcomment.com.br. He can be contacted at jf@celt.com.br. © John Fitzpatrick 2007
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7 years later (in 2002)....the Real plunged 75 % and is still today, despite the recent recovery at Reais 2.15 to the dollar, meaning a depreciation of around 50 % from the initial date of the Real Plan !
Strange that John finds this as a positive outcome.
And if that was your only sucessful long term accomplishment...my god....Brazil was/is and will remain a country governed by inept people. Your Politicians should return to basic economic schools...for few years !
More lousy, difficult to find.
Could be that Brazilians are born as natural loosers ! Whatever you do....you do it wrong ! Therefore your repeated failures become quite normal !
And believing that you will be smarter today or tomorrow has not been proven yet.
Afterall your nickname of BOOM AND BUST ECONOMY is quite justified !
Even during the last 4 years, you have lagged against ALL the other developing countries. Looks like you enjoy to be at or near the bottom of the various rankings.