Lula Gloats Brazil Is Better Prepared than Anyone to Tackle Global Crisis

Lula, minister Dilma Roussef and senator José Sarney There is no other country in the world better prepared for the global economic meltdown than Brazil and no other than its president, Luiz Inácio Lula da Silva, guarantees that. The Brazilian leader is defying and mocking those naysayers who he says are betting against Brazil and rooting against his administration's success. 

"I can tell as President," Lula said in a speech during the inauguration of a railway stretch in the northern state of Tocantins," that there is no country in the world better prepared to face this crisis. There is no country in the world better prepared than Brazil, with more stability. We have reserves, we have market, and we have a growing economy."

Lula told Brazilians that Brazil is not going to go broke due to the international crisis as some people wish. He reiterated this is no time to stop consuming and much less giving in to panic. Once again he reminded the public that the current crisis was born out of speculation and that it was speculation that brought the US to its knees and broke the American economy.

The president compared the US meltdown to "a bubble, an egg without yolk", which breaks and has nothing inside.

"But here we didn't go broke and we are not going to go broke. There are people rooting for us to go broke, there are those who go to bed and pray: "I wish the crisis will get Brazil so that Lula will get screwed."

Data from the IBGE (Brazilian Institute of Geography and Statistics) show that the Brazilian economy grew 6.8% in the third quarter of 2008, when compared to the same period last year. From January to September the country's GDP has increased by 6.4, also in comparison to 2007. Commenting on that Lula stated:

"When someone wishes to make money without producing any good, he is a thief or a speculator, because the money of a nation has to be produced at the cost of production. The result of a country's growth is due to the result of the production growth of that country," added the president.

While asking Brazilian to continue buying, Lula also advised those who have already big debts to not get new ones.

"If you have debts, my son,  do not take on more debt, for God's sake. Pay your debt, pay it. What is the advice I give people? If you are in debt,  do not take on more debt. Now, if you have a little money, if you have the 13rd salary (Brazil's year-end extra month salary paid to every employee) and if you have a little money, and wish to give a microwave as a gift, in easy installments, if you can, buy. Because if you do not buy, then we will have a crisis in Brazil. If everyone stops buying and the economy halts, we're going to have a crisis."

Lula said that it is wrong to stop consuming because of unemployment fears, since consumption stimulates commerce, which stimulates the industry. "This is the contradiction," he explained. "Imagine the economy as a Ferris wheel."

Lula insisted that there are people rooting for the crisis to hit Brazil, adding that there is a lot of " organized propaganda in favor of the crisis."

"There are people rooting for us to go broke.  Read and watch television. Listen to the radio. It's almost an organized propaganda in favor of the crisis. I think we should talk about the crisis because it is serious, it is profound, but it wasn't caused by us," he went on.

Presidential Elections

Lula once again talked about making his successor in the presidency. "I'm certain that I will make my successor," he said in the presence of his chief of staff, Dilma Rousseff, who is believed to be his choice to succeed him.

A DataFolha poll shows the governor of São Paulo, José Serra, as the favorite to win the 2010 presidential election, with 36% to 47% of the votes depending on the opponent. Roussef seems to be improving her numbers, but she's still not getting more than 12% of the electorate.

The president of Brazil's Central bank, Henrique Meirelles, commented that the latest numbers from the IBGE showing the Brazilian GDP with a 6.8% growth in the third quarter is proof of the Brazilian economy's solidity and strength.

"This strength gives us objective reasons to believe that Brazil's economic deceleration will be shorter and of smaller intensity than in other countries. As in preceding quarters the Brazilian economy kept on expanding its productive capacity. The consumption by families, which can be seen as an indicator of the population's well-being, has also shown significant expansion," stated Meirelles.

At the end of the day, Lula signed a temporary measure giving US$ 2 billion to the BNDES (National Bank of Economic and Social Development) for loans to businesses, especially exporters, at a lower interest rate than that offered by commercial banks.

The money is part of a US$ 5 billion loan Brazil received from the World Bank to deal with the international financial crisis. Borrowers will pay Libor (international interest rate currently at about 3% a year) interests plus 1%.  For Finance Minister Guido Mantega this is a low rate.


The US dollar lost some ground this Tuesday, December 9. The greenback closed the day being negotiated at 2.471 reais per dollar, a 1,19% devaluation for the day. The trading session was fickle. The dollar went up 2% during the day but backed out following interventions by the Central bank.

Brazil's stock exchange, the Bovespa, had also a volatile day. After ups and downs throughout Tuesday the market closed 0.83 down at 37.965 points.

The volume traded was 4.3 billion reais (US$ 1.73 billion), a little below the almost 4.8 billion reais (US$ 1.94 billion) negotiated on Monday.


  • Show Comments (11)

  • The cure for Ch C

    PS, do some reading
    Go read the front page of the Economist online to see what is happening with China…not good for anybody, but it illustrates my point.

  • The cure for Ch C

    outer space..are you on glue???
    Why any country would be WASTING money on space travel at this point is beyond me. Its only a bunch of posturing to show that we are like the big boys now.

    RE diversification: China exports manufactured goods. India exports software and call center services. No Brazil has not built its own car but it builds millions of international companies cars. Has China or India built its own successful line of jets???

  • jose d

    Curious diversification The Cure….has Brazil built it’s own car like China or India..has Brazil been into outer space like the other BRICs???

  • bo

    The dollar is worthless Lloyd? It’s risen against nearly every currency on the face of the planet significantly over the last 4-5 months. Just 5 months ago 1 dollar was worth 1,55 reais. Today 1 dollar is worth 2.50 reais! It has even risen significantly vs. the GBP (Pound Sterling), 5 months ago 1 GBP was worth 1.9 dollars, today 1 GBP is worth 1.5 dollars.

    And MORE foreign investment is coming into brazil? Where in the hell are you getting your facts? I’m here in Brazil and every single day they report that the drastic decline of the IBOVESPA is simply because nearly all the foreign investors have fled!! The brazilian stock market has fallen by nearly 50% from it’s high point this year until this moment and it’s because the foreign investors have taken their money and ran!

  • The cure for Ch C

    again, get your facts straight
    It is a $30 billion dollar LINE OF CREDIT that has not been used.

    And China OFFERED the $10 billion dollar loan…there is nothing saying it has been accepted…China is trying to take care of their own future oil supplies.

    You always bring up the same old numbers of how the other BRIC nations are doing so much better than Brazil (looking only at economic growth). Go look at today’s The Economist. China is in BIG trouble.

    Also, you never seem to mention that Brazil’s economy is much more diversified than either China and India. They will be hit the hardest of the BRIC countries.

    Just using the same old tired statistics so you can bash Brazil without any eye for the big picture.


  • Lloyd Cata

    Beauty in the eyes of the beholder
    When I told many of my friends last year, indeed in this forum also, that Brazil would grow despite the coming economic collapse in the US they thought I was insane. No, no, they said, “Brazil is too much tied to the US economy. It is not possible to grow if the US slides.” Well, here we are with the US in the grip of the biggest collapse since the Great Depression and Brazil shows continued growth. Why?
    Why are foriegnors sending ever larger amounts into Brazil at a time when their markets are collapsing? China $10 Billions?
    Well, I will now tell you what you still refuse to understand; THE DOLLAR IS WORTHLESS. So why not spend them now where there is some chance of return in a growing economy. This is a real danger if Brazil does the wrong things with these investments.
    First, as you see already, ,the evil inflationary pressure.
    Second, they are buying real property with a depreciating currency (yeah, I hnow the dollar appears to be strong now, just as the US economy appeared strong 6 months ago; just wait!)
    Third, these cheap dollars will sow the seeds of overwhelming corruption in which foriegnors will dictate your economic policy.
    The only chance for Brazil is to mandate foriegn investments MUST be in REALs and remittances MUST be in REALs. Otherwise worthless dollars will be used to buy Brazil and later make Brazil repay in gold.
    Here is the basis for this argument;
    [now go and prosper]

  • ch.c.

    According to the federal gov’t. their dollar surplus hasn’t declined one cent. How is that possible ?
    Simple :
    Brazil borrowed US$ 30 billion from the U.S. Fed.
    Money due next April, but it probably could/will be renewed !

    the facts about Brazil Government (outside of these $ 30 billion) :
    – in the left pocket they have $ 200 billion…in foreign currencies reserves
    – in the right pocket they have $ 200 billion…in foreign currencies DEBTS

    How much do they then really have ?
    Sure, cheaters always only talk about their left pocket…never about their right pocket hole !!!!

    Who is surprised ? Not me….GUARANTEED ! smiles

    Ohhhhh… the way, Petrobras just got a $ 10 billion loan from China !

    Why from China….if LULA has so much reserves ??????

    Hmmmmm…simply because cheaters always cheat, liars always lie, and hiders always hide !

    So true…..for Brazil !

  • ch.c.

    Whoaaaaaa !!!!!
    “There is no other country in the world better prepared for the global economic meltdown than Brazil and no other than its president, Luiz InÀƒ¡cio Lula da Silva, guarantees that”
    “There is no country in the world better prepared than Brazil, with more stability. We have reserves, we have market, and we have a growing economy.”

    What about China, Russia and India economic growth rate ?
    What about China, Japan, Russia and a few others more having AT LEAST TWICE BRAZIL FOREIGN CURRENCY RESERVES….derspite having a smaller population than Brazil…except China ?????? But China has TEN TIMES what Brazil has in foreign currencies reserves !

    Lets face it, Lula the Idiot is becoming INSANE ! He is losing sense of reality !
    If Lula guarantees are worth something, why has HE changed the methodology for the economic growth rate, while before changing it HE GUARANTEED 5 % GROWTH RATES FOR….YEARSSSSSSSS TO COME !

    Has he not promised 10 millions new jobs for his first mandate ? Failed…miserably ! 6 millions new jobs only
    Has he not promised 400’000 MST settlements for his first mandate ? Failed….miserably ! 200’000 settlements only !

    And if Lula the Cheater guarantees are worth something, then why doesnt he put HIS yearly salary and perks…..on the table….as guarantee ?????? Or better…..his mandate !

    Facts are Brazil under Lula reign had :
    – the lowest economic growth rate of Mercosur
    – the lowest economic growth rate of the BRIC
    – one of the lowest economic growth rate of ALL South & Center America, including the Caribeans countries
    – one of the lowest economic growth rate of ALL the World Emerging Nations

    And Lula continues to guarantee MORE while delivering less than 90 % of his peers…as usual !!!!!

    Eventually, Brazil should create the LULA CLINICS ! Clinics for mentally degenerated people !

    😀 😉 😀 😉 😀 😉 😀 😉 😀 😉

  • Ric

    It’s His Job
    Politicians always have to go to the mike and say that “the fundamentals are sound” or “we will weather this crisis” or “our experts have this figured out”.

    In politics nothing is confirmed until it is officially denied.

    “We have nothing to fear but fear itself”. It was a lie then and still is. But to the politician, his job is to prevent bank runs and keep people consuming and buying. And how the public feels does influence the economy.

  • bo

    [quote]The money is part of a US$ 5 billion loan Brazil received from the World Bank to deal with the international financial crisis. Borrowers will pay Libor (international interest rate currently at about 3% a year) interests plus 1%. For Finance Minister Guido Mantega this is a low rate.[/quote]

    If Brazil has 200 billion in reserve, why are they borrowing money from the IMF? Exactly how many Banco Central “interventions” have occurred over the last 3-4 months? How many dollar auctions have occurred over the last 3-4 months? According to the federal gov’t. their dollar surplus hasn’t declined one cent. How is that possible?

  • forrest allen brown

    with the lack of a real life what will they be missing
    that will be easy for brasilians that are use to starving and not having a job to buy the simplest food

    and to give bends 2 billion is just a simple way to give money to his rich friends to fail yet another business .

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