Dissidence on Brazil’s Top Floor

Driven by a surge in exports, the Brazilian economy is stable and growing again, but there is now evidence of dissonance at the highest levels in BrasÀ­lia over how to handle everything from monetary policy to genetically modified soybeans, reports Newsweek’s Special Correspondent Mac Margolis.

In its October 18 issue, Newsweek International says that disputes over economic policy have stalled many coalition governments, and Brazil may be running the same risk.


While the market-driven economic policies have worked for the country, some top government officials still favor state intervention, writes the American weekly magazine.


According to the article, Brazil’s economy is stable and growing again, at a rate of 4 percent. These numbers were rewarded in the October 3, municipal elections, with the government party, the PT  doubling its number of mayors.


Margolis notes, however that “to some of his oldest supporters, the new Lula is a turncoat. After all, tight money and deference to free enterprise were the hallmarks of the previous President, Fernando Henrique Cardoso, whom the PT fought tooth and nail.”


According to the author, there is little agreement in Brasí­lia. Lula’s allies are having several disputes from what monetary policy to adopt to doubts whether genetically modified soybeans are the answer.


The magazine also talks about “the powerful chief of staff, José Dirceu” and vice president José Alencar frequently grumbling about the Brazilian central bank’s high interest rates.


Newsweek cites São Paulo’s economist Eduardo Giannetti: “Part of the Lula government is market oriented and the other part is for state intervention.It’s like two halves of a brain that aren’t connected with one another.”


Brazil used to attract $20 billion to $30 billion in foreign investment annually in the 90’s. This year it won’t draw $12 billion, half the amount industrialists say are necessary to modernize equipment and repair a deteriorating infrastructure.


Lula himself is being pressured to stop sending out conflicting signals to investors and creating a climate of uncertainty, says Newsweek.

Tags:

Ads

You May Also Like

Where Brazil Was Born

In Ilhéus, state of Bahia, the hills are covered with cacao trees. If you ...

Brazil: Bovespa Down. Blame It on Petrobras.

Brazilian stocks continued south, yesterday, again mirroring a decline in the U.S. market. Brazilian ...

Brazil’s Gift to the World in 2009: Lowest Amazon Deforestation in 20 Years

According to Brazil's first National Inventory of Greenhouse Gases, up to 75% of Brazil's ...

Chí¡vez is Urged in Brazil to Keep Democracy Strong

Brazil's Lula da Silva and Argentina's Nestor Kirchner called on their Venezuelan counterpart Hugo ...

Brazilian Women Victims of Violence Urged to Denounce Their Assailants

“Do not report tomorrow the abuse you suffer today.” This is the motto adopted ...

You Will Be Hearing a Lot About Brazil’s MST and Their Marches and Invasions

No one knows if President Luiz Inácio Lula da Silva, reelected on October 29th, ...

South American Union Born Amid Disagreements and Controversies

Unasur, the South American Union of Nations was officially born Friday, May 23, in ...

WikiLeaks Reveals Paraguay’s Fear of Brazil’s Imperialism

According to a diplomatic cable exposed by WikiLeaks and reproduced by the Brazilian portal ...

Foreigners Don’t Pay Capital Gain Taxes on Brazil’s Bonds Anymore

Latin American stocks advanced, with Brazilian shares getting a boost from some encouraging earnings ...

Arabs Are Ready to Deal, But Brazilians Have to Put Some Effort

Brazil's foreign minister, Celso Amorim, is back in Brazil after a five-day tour of ...