In testimony before the Brazilian Senate Economic Affairs Commission (CAE), Brazil’s Minister of Finance, Antonio Palocci, underscored the consistency and progress achieved through the economic policy adopted by the present Administration.
"We are entering a cycle of protracted growth. We gave Brazil the opportunity to sustain a long and consistent growth cycle," the minister affirmed.
He mentioned the war on inflation, the fiscal adjustment, and the figures that ensure sustained development.
"Exports have reached an extraordinary level, contrary to all forecasts, even our own," the Minister pointed out, noting that the country’s foreign sales surpassed US$ 100 billion for the first time.
According to Palocci, Brazil attained this plateau, owing to the model that has been in effect since 1999, when the country decided in favor of a floating exchange rate.
The Minister also observed that profitability is now higher among businesses than in the financial sector.
Palocci emphasized, however, that, in his view, the most significant result is related to the increase in the salary mass.
"Formal employment has been churning out figures that are quantitatively much greater than those for the informal sector," he noted.
He said that there has been a consistent increment in workers’ income and a substantial elevation of the salary mass. He also referred to accomplishments made in the war on inflation in Brazil and "converted into workers’ purchasing power" and in income transfer programs, "with an important impact on people’s lives."
According to the Brazilian Minister, the success is not due solely to the economic team; "rather, it is the result of an effort spanning more than a decade."
He highlighted measures adopted under Fernando Henrique Cardoso’s Administration, which opted for a floating exchange rate in 1999, adopted the system of inflation targets, and created the Fiscal Responsibility Law.
He also cited Itamar Franco’s Administration, which launched the Real Plan and the war on inflation, and José Sarney’s Administration, which abolished the Bank of Brazil’s "conta-movimento" or operational account [‘a massive rediscount facility of virtually interest-free funding from the Central Bank’] and founded the National Treasury.
Without the National Treasury, Palocci remarked, "we wouldn’t even be able to control accounts." "Brazil evolved and matured with the pillars erected over the course of these years," he affirmed.
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