Lula Soothes Brazilians, Then Asks Them to Trust Him and Go Out and Shop

Brazilian President Lula speaks Despite the international economic crisis the President of Brazil, Luiz Inácio Lula da Silva, wants his fellow Brazilians to keep on shopping but responsibly as he puts it. This advice was part of the president's year's end message shown on network TV this Monday, December 22.

Lula once again assured that the country's economy is solid and that the crisis will only make Brazil stronger.

For Lula, the global economic meltdown was born in the First World triggered by lack of oversight from the wealthier countries over the financial system. As he observed: "The gambling went too far, and one day the bill came due. Banks went broke, a large number of companies got into trouble and millions of workers lost their houses or their jobs."

According to Lula, Brazil shouldn't fear any inflation this year despite a hike in prices overseas. He also told Brazilians that in 2008 alone, up to the end of October, 2.14 million jobs were created in Brazil. He didn't mention, however, data just released by the Labor Department showing an increase in unemployment in the country.

The Brazilian leader also talked about recent findings of oil offshore. Lula believes that soon Brazil will become one of the largest oil producers in the world.

The president said that people shouldn't be afraid to consume with responsibility. So, he advised that anyone with some money should go out and buy whatever he's dreaming of: a refrigerator, a stove or a brand new car.

For Lula, buying is a civic duty and a way to guarantee a job. "If you don't buy," he says, "the commerce doesn't sell. And if the store doesn't sell,  it will not place new orders to the factory. Then the factory will produce less and, in the medium term, your job might be at risk."

The president's speech in its entirety:

My friends,

Tonight I want to talk to you about the world economic crisis. It is a very different crisis from the one we had before.  It didn't arise in an emerging country or in the system's periphery. In the contrary, it was born and it exploded in the heart of the developed world. More precisely, in the United States and in Europe.

This crisis, which affects the whole world, was triggered by lack of oversight of the financial system in the wealthier countries. Instead of fulfilling their role in the economy, financing the productive sector, the banks became a big casino.

The gambling went too far, and one day the bill came due. Banks went broke, a large number of companies got into trouble and millions of workers lost their houses or their jobs.

Here in Brazil we didn't have this kind of crisis. Our bank system was and still is healthy. Our economy, settled and organized, has been growing at robust rates, the biggest in the last 30 years.

Therefore, the crisis takes place during our best moment. It's a shame, but since we are doing very well, the situation is less complicated. Everybody agrees that we are one of the best prepared countries to tackle this challenge.

In previous crises, Brazil would go broke in a few days and was forced to ask the IMF for help. This time, Brazil didn't go broke and won't go broke. It's facing the situation with the head held high.

While most rich countries are in recession, Brazil will keep on growing. It is true that, with favorable wind, we could go farther. But, even against the wind, we can and we'll keep going ahead.

If we are today in better conditions to tackle any crisis, that's because we knew how to make the right choices. That's because we accelerated the growth of the economy in consistent foundations. And we grew up distributing income and reducing inequalities among regions.

First, we kept inflation under control. When I took on the government, inflation was above 9%. It started to decrease year after year. In 2008, even with the explosion of international prices, the inflation is going to stay within our target.

We also reduced the public debt. In 2003, the debt made up 52% of the GDP. It kept falling and this year it should amount to 36%.

Moreover, we diversified our exports. I traveled throughout the world as a true peddler of our products. Some criticized us. But today, when the United States and Europe are in the hurricane's eye, we see how right was the decision to diversify our commercial connections.

My friends,

Another advantage are our large reserves in international currency. When we took office, Brazil owed the IMF and the Paris Club a lot. Today, it doesn't owe even a cent.

At that time, our reserves in foreign exchange were very low. Today they reach 207 billion dollars. With that, we are no longer debtors but international creditors. Quite a big difference. Now we have a safety mattress to protect us.

But our best defense today is the strength of the domestic market. It made extraordinary progress these last few years. For that, the Bolsa Famí­lia (Family Grant), a better minimum wage and job expansion were decisive.

From 2003 up to now, the minimum wage grew 51% in real terms and job opportunities also grew strongly.

In 2007, we broke a record: 1 million 812 thousand new jobs with people formally hired with work papers signed by their employers. In 2008, a new record: by October, 2 million 148 thousand jobs. Result: the unemployment rate fell from 12.3% in 2003 to 7.6% in October 2008.

Our economic and social development allowed that in the last few years, more than 20 million people could move into the middle class.

All this made the economy wheel go around more strongly and opened a virtuous circle in our country. We changed face and vibe.

My friends,

These advances are allowing Brazil to tackle the current situation with firmness and serenity.

And we are taking action in all fronts since the crisis started. We've already adopted measures to bring credit back to normal, to support our exporting companies and to keep active the sectors that generate more jobs, like the small and medium size companies, the agriculture, the civilian construction and the automobile industry. We reinforced the fire power of the state-run banks and we lowered taxes so that companies and consumers could have a little more cash on hand and in the pocket.

At the same time, the government will keep all the investments planned by the Growth Acceleration Program, and the social programs. Under no circumstances, there will be cuts in government investments. Because they are decisive for Brazil to tackle the crisis and get out of it reinvigorated.

My friends,

I wish to tell you, with all serenity, that the crisis does not frighten us. The country is ready and it has a leader. We will keep on following with a magnifying glass the state of the economy, 24 hours a day. Whatever needs to be done will be done. At the right time and in the suitable dose. And we'll be always talking and listening to the country.

But it is fundamental that all do their part.

It is important that businessmen keep on investing. It is indispensable that workers support production and their job. On the other hand the financial sector, should work to stimulate credit and lower interests, which are too high.

"You, my friends,  don't be afraid to consume with responsibility. If you have debts, try to first  balance your budget. But, if you have some money in your pocket or you got your thirteenth salary, and you feel like buying a refrigerator, a stove or switching your car, do not miss your dream for fear of the future,"

"Because if you don't buy, the commerce doesn't sell. And if the store doesn't sell,  it will not place new orders to the factory. Then the factory will produce less and, in the medium term, your job might be at risk."

This way, when you and your family buy some good,  your are not only fulfilling a dream. You are also contributing to keep the economy's wheel turning. And this is good for all.

My friends,

I can assure you that Brazil not only will overcome the crisis, as it will come out of it stronger. We have all the conditions for that. In 2009, we will start to explore the huge reserves of the pre-salt. With that, Brazil will become one of the world's great oil producers. We are all on the same boat. And if we row together towards the same direction, we will overcome bad weather and we will go on in our growth course. It all depends on us.

A Merry Christmas to you and your  family. May 2009 be an even better year than 2008. May it be a year of health, peace and prosperity.

Believe in Brazil because above all, you will be believing in yourself.

Good night.


  • Show Comments (6)

  • falupa

    The economy…
    Trust Lula? That is a riot. I think I have heard it all. Just make sure you don’t use a credit card. That is one of the major problems that we are having. We are spending more money than we have. This is the exact reason why we are in the financial crisis right now.

  • ch.c.

    To concrete guy “” balance your budget but if you find a few extra dollars-”
    You are such a concrete guy that you are telling us that Brazil has the US$ for currency ! Right ? smiles

    Another Robbing Hook lie is the following :
    “from 2003 the unemployment rate fell from 12,3 % to 7,6 % in October 2008” Right ?
    Well this is for registered workers which total around 32 millions.
    During his first mandate jobs grew by 6 millions and then by 1,8 millions in 2007 and 2,1 in 2008.
    Does that means that your jobs grew by 50 % between from 2003 to 2008 ! In a way…yesssss !
    Hopefully you understand the stats manipulation ! BIG…VERY BIG….STATS & MATHS MANIPULATION.

    Last but not least :
    it is not because you have some extra Brl…that one doesnt have very very very high interests rates on their monthly installments for consumers goods, but also have to pay 35 % these days on cars loans, and 13-15 % on mortgages rates.
    Therefore the question if someone has a few “extra” Brl…what sounds the most logical : spend or reduce the debts to pay LESS
    EXTRAVAGANT interests ????
    I just remind you that the remaining debts keep going UP at a steep angle, in view of the famous Brazilian Interests Rates….BY FAR THE WORLD HIGHEST….IF YOU DID NOT KNOW YET !!!!!

    As to the Robbing Hook statements that banks in developed nations became a casino, he is definitely right !
    But funny that HE did not said why there is such a high number of banks mergers in Brazil….as much as in the USA, comparatively !
    And he of course did no admit that Aracruz, Sadia, Votorantim “naturally” switched their profits centers from Pulp, food, etc to
    FOREX DEALING WITH HIGH LEVERAGE….where they truly excelled as much as the developed nations banks in their subprime prowess !!!!

    We all of nearly all should be happy this is the end of the year. By next January or February at the latest, many more Brazilians companies will have no alternative than to finally disclose how good they were themselves in FOREX trading !
    Most of the losses started to go real bad by October…already in the fourth quarter !
    By some Brazilians estimates there are anywhere between 200 to 400 companies that lost money in FOREX PROWESS !

    Were these number of losses (I am not talking of amounts but number of companies) over estimated or under estimated ? Welll…I have Nooooo Idea of course !
    But there is shortly the reality that will surface, not only due to the fourth quarter results, but also for the full year results !
    And the amounts involved will even be far more relevant than the numbers of companies !

    Positives surprises or Negative surprises ? Time will tell….I dont speculate on this !
    My simple nose is telling me that surprises could be negative since the Brl is now close to its year low !
    Unless of course the companies realized their losses earlier in the fourth quarter…but that will show up in their fourth quarter results one way or the other !

    Interesting times lie ahead in the not too distant future !

    Another thing that Concrete Guy is not really aware of is :
    – true there was little subprimes losses in Brazil, but the country if full of STRUCTURED products.
    Structured products are not that much different than subprimes structured notes or products. It is just the underlying that is different ! Not necessarily the RISKS !

    How are/were they priced on the companies OR BANKS books ? As much as the subprimes were priced : too high….and then…priced lower and lower…to smooth the losses AND SPREAD THEM OVER TIME ????

    Once more we will know more by next January or February !!!!!

  • du48

    Agencia Brazil,TV Brazil – Government propaganda and disinformation: phantom public service
    While the President was basting the turkey or ‘chester’ – aka giving the xmas message -TV Cultura was showing an interview (Roda Riva ) with delegado Protogenes Queiroz, until 16 July in charge of operation Satiagraha- (Daniel Dantas, another lovely investment banker.)
    TV Brazil, it seems, did not show this as they normally do.
    Turkeys don’t vote for Xmas -as for chesters…. I rest my case.

  • João da Silva

    [quote]The message I got was ” balance your budget but if you find a few extra dollars- spend them”[/quote]

    When the Government does not know how to balance its budget what moral does it have to preach?

    [quote]if you don’t buy others won’t sell, nobody ends up with a job.[/quote]

    Right. The Chinese factory workers are the worst affected.

    [quote]Those who can, should.[/quote]

    They always do. The problem is with the 33.33333 % of the Brasilians who are in debt (and shit)list. Any suggestions as how to alleviate their misery?

  • concrete guy

    project manager
    I think you should read his speach again. The message I got was ” balance your budget but if you find a few extra dollars- spend them” This is common sense if you don’t buy others won’t sell, nobody ends up with a job. Those who can, should.

  • ch.c.

    Lula Soothes Brazilians, Then Asks Them to Trust Him and Go Out and Shop
    Ohhh sure and pay these purchases with monthly installments…at 55 % annual interests rate, or 200 % for overdrafts !!!!

    Will the 2009 rates go down ? May be ?
    Lets be positive and say 28 % for cars instead of 35 %, 45 % on consumers goods instead of 55 %, and 160 % for overdrafts instead of 200 %.

    And guess what brazilians will do ???? you will warmly APPLAUDE HIM with
    Viva Lula….Viva Lulaa….Viva Lulaa


    In Brazil the advertisments say : “BUY ONE, PAY TWO FOR SURE…AT TIMES PAY 3”

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