Otaviano Canuto: This Brazilian Keeps an Eye on the World’s Poverty

Brazilian Otaviano CanutoWho is the World Bank Vice President of the Poverty Reduction and Economic Management (PREM) Network? Where does he come from? What does he think? Who is Otaviano Canuto, after all? If you google him, you will learn that he heads a division of more than 700 economists and other professionals, all working on economic policies, poverty reduction, and analytic work for all the bank’s clients around the world.

Canuto came from another V.P. position at the Inter-American Development Bank, where he had been since 2007 and in May of 2009 he took the job that brought him to be the man with his eyes on the world poverty, handling the best proposals to fight it. He has to be someone special, one assumes, solidly knowledgeable, but who is he?

Aside from the fact that he has served in the Brazilian Ministry of Finance, was a Professor of Economics at the University of São Paulo (USP) and University of Campinas (UNICAMP) in Brazil, who is this man?

A polyglot with a history of lectures and over 70 articles published in newspapers, economic journals and books; but who is Otaviano Canuto? Someone with a special mind, curious and restless enough to make him move forward eagerly, in search of changes. Otaviano Canuto comes from Aracaju, the capital of the small state of Sergipe, in northeast Brazil. Born to middle-class origin, Canuto had a uniquely talented father, a self-made architect who created a school of influence in the region but who could not sign his own projects for lack of formal architectural training.

Otaviano Canuto, the father, was also an amazing painter, a well-known and respected artist, an introspective man of few words. Surrounded by books in different languages and paternal pride and virtuosity, Otaviano Canuto was a normal child, a little more restless than ordinary, the kind one would call ‘a little brat.’

Teenage days brought ambitions to leave and after graduating from college, the opportunity to do it. There was not much money available in the family, so he had to pave his own way out. We spoke with Canuto and here are excerpts of the conversation:

How did growing up in a small Brazilian city from the Northeast, modestly, surrounded by art, affected and influenced your life?

My father gave me so many examples, and because of his influence, I never left aside my own artistic potential, even with my busy schedule. I even play in a band with three of my children. We do Brazilian music with a rock flavor, a kind of a blend, actually. Luisa plays the bass, Lucas, the drums, I play the guitar, and there was my son Pedro, who played the guitar. (Pedro Canuto died tragically in an accident few weeks before this interview).

It’s like I was born into talent, my father was so talented, I was there, I grew into things. He was a master of architecture, self-made, and developed a technique that conquered followers. It still saddens me that he died before he could publish his book on perspectives in drawing.

My father’s intelligence and creativity were my main source of inspiration. I remember him telling us how he had learned technical drawing, from a book he bought that was written in Spanish. That was key for me, that’s when I learned that you can pursue your goals, go after the things you want and get them, no matter the obstacles ahead.

Did that get your eyes looking further, a desire to leave and explore the world?

I think so, that made me attracted to the world, to going outside my little world and explore more. I felt the desire and I went after it, I left. The small town where you come from is dear to you, but it does not offer you too many options; there are also personal limitations to behavior, just all kinds of things. I think something that is good for anyone is curiosity, and the right to extend your concerns. When someone becomes really curious, that’s when he can open doors, while learning about how diverse the world really is. Life then becomes more complicated, but infinitely richer.

And one has to keep on opening doors and experimenting. Like when you go live in a foreign country, you can easily allow yourself to be imprisoned in the syndrome of the immigrant, stay inside your own box, bring your familiar world with you, refusing to really live in the new country, I see this as a source of suffering. You have to face the new, to live it, to fully experience it, you can do that without losing your own roots. You can encounter the new worlds without losing your own old world.

What took you to the world of economics?

It was by accident, believe me. I did go to college in Aracaju, my hometown, at the Federal University, and my major was Economics. We all have original dreams, desires, and as we start cruising the road of life we realize that, as you follow each step of the way and your life starts coming through, the original dream was utopian. I left Aracaju in the 70s, when I engaged in a training program in Brasília.

It was a national competition, there were 900 registered dreamers and only 36 openings. Well, I got in and before I knew I was moving to Montreal, to work at the Brazilian consulate, as part of the program. It took a lot of hard work, a combination of hard work and a good opportunity. In Montreal I got a masters degree. Back in Brazil, I realized or thought I was meant for an academic career and got a Ph.D. at UNICAMP, where I taught several years, living a basic academic life.

What was the turning point?

In 1997 I was invited by the newspaper O Estado de S. Paulo to write an article on the economy, which I did. And I liked it, I liked it a lot. My wife’s Catherine’s father was editor of the economy for Le Monde, in France, and she knew a little about how to handle that desire. She advised me to write a new article every two weeks, and the editor would most probably appreciate my determination and eventually he would publish me again. So I did.

Every other week there goes an article and all of them were published. I was thrilled and couldn’t believe it when they called and invited me to write on a regular basis. That led to another invitation, later, to write a column at Valor Econômico and it so happened that my articles started calling attention in my direction.

Before I knew the President of Central Bank was writing me and we started exchanging letters and notes; then it was Pedro Malan, and before I knew Antônio Palocci invited me to join his team at the Minister of Finances after president Lula’s election. From there I was suddenly working as a member of the board of the World Bank and that’s when I realized this was the life that I really wanted for me.

I stayed in this position for three and a half years, representing nine countries. Then I was invited by the president of BID and worked as a VP for two years, until I returned to the World Bank as VP.

How is it like to hold such a powerful position?

Things are done by the countries, no outsider is going to operate. The bank is useful because we finance their programs. I like to say that the bank works like a humming bird, we assist, watch and learn, so we can take the new successful experiences elsewhere and help prevent new failures, by spreading the acquired knowledge. In short, the power belongs to the countries, not to the bank. We help. The World Bank is meant to help to reduce poverty in all its dimensions of human development. Poverty is but lack of empowerment, and by empowering we can contribute.

Where there is money, there is the danger of corruption. Do you condition the granting of funds to socially responsible programs, following the use of such grants tightly and closely?

No one has the monopoly of corruption but we can work to minimize the risks. We operate tri-dimensionally, protecting the funds to be used exactly as it was originally approved; monitoring the control system of the governments, we help the countries that come to us to introduce mechanisms of transparency and organization. We also work together with countries that do not take money and companies and corporations of the G-20 and G-8 countries.

We don’t just worry about the money the countries take from us, we worry about helping these countries. The humming bird learns tested winner programs and takes them elsewhere, like for instance, the Bolsa Família, Brazil’s conditional wealth transference program. Other banks, like BID, and banks of development, even though they have good programs, they work within their regions, they are not, like the World Bank, the global humming bird.

How do you see this global crisis?

The crisis is deep but it is directed to finances, it is not a crisis of the market system, which means it is a crisis that will pass. The government is going in the right direction, it just could not let the system fall, it did what it had to do, gave money to the banks, because if the bank system dies, everybody will go along; the banks had to be kept alive.

Today’s big challenge is no longer thinking of when and how to get out of the crisis, attentions now are focusing on public finances, the discussion is open and the world relies on the sensible management of fiscal and monetary authorities of the main countries, so that they do what is required of them and know when and how to get out. It is important not to leave too late or too soon. In 1930, they left too soon, the Fed washed its hands. In 1937 and 1938, the American government left prematurely.

What is different today?

One major difference is the weigh of the emerging economies; their potential and rhythm of development is much bigger, and they weigh way more than in 1930.

Economists say this crisis will open new opportunities for the emerging economies, mostly Brazil, India and China; how do you see this?

When the rest of the world grows, it means that the United States will not be the only powerful one. But the pre-condition for solid and stable growth is to do the homework. Brazil, for instance, the way it faced the macro-economic instability in the last 15 years has given the country the grounds to react well to this crisis without too much pain.

This will widen Brazil’s potential as a spot to the rest of the world. Brazil now has a solid and durable process, that is well founded in its society. The country went through administrations of different tendencies, but they kept the basic commitment to the responsibility of leading with the macro-economy – that was kept and pursued and that’s how we reached a solid spot. Now to make the picture more complete, we need to find better ways to fight deforestation of the Amazon and just do it too.

Busy life aside, when you just wake up in the morning and grab a cup of coffee in your pajamas and think about a day without must-dos ahead, what do you choose?

I choose to do everything very slowly, without looking at the time; I check with my family for ideas, what we can do together for fun; I may read a magazine, something light, watch a soccer game, go out to eat, and chit-chat, talking about things of which I understand very little or nothing at all…

Clara Angelica Porto is a Brazilian bilingual journalist living in New York. She went to school in Brazil and at the University of Wisconsin in Madison. Clara is presently working as the English writer for The Brasilians, a monthly newspaper in Manhattan. Comments welcome at clara.angelica@gmail.com.


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