Lula Goes to Davos, But World Doesn’t Care About Brazil

Brazilian President Luiz Inácio Lula da Silva has arrived in Davos, Switzerland, where he is the only South American chief of state to participate in the latest edition of the World Economic Forum, an annual summit that reunites and is a platform for the world's most developed countries.

Lula is scheduled to meet later today with executives of American corporations including Citi Group and Google. The Brazilian president will also be meeting with Gordon Brown, the United Kingdom's Chancellor of the Exchequer.

Brazil's Central Bank president, Henrique Meirelles, who is traveling with Lula told reporters in Zurich that the Brazilian participation in the Forum this year is quite different from years past:

"Brazil is back to Davos," the minister said, "with a different set of ideas, another posture and another situation regarding the other countries. I think this is a favorable and important  occasion. Today, Brazil is not cause of concern to the world anymore: it is a stable economy intent on growing faster and faster. The country is  seeking a way to do this with stability, confidence and consistency".

Finance Minister, Guido Mantega, is also accompanying the president. Both will be trying to sell to a skeptical world the idea that Brazil is on the right track.

Earlier this week, Lula presented Brazilians with a plan, the PAC (Growth Acceleration Program), which according to the government, should put Brazil on a 5% growth path, while other countries like China, India, Argentina and Venezuela are growing double this rate.

For many world economists and leaders, the Brazilian package is not enough to promote sustainable growth. They would like to see structural reforms that would change the way Brazil taxes businesses and consumers, as well as reform the social security and the judicial system.

The PAC, however, deals only with investments and improvement in infrastructure: about US$ 240 billion in five years, only 14% of which comes from the government's coffers.

In contrast to what happened in 2003 when Lula was a star during the Davos meeting, this year there seems to be very little interest in Brazil and the whole of Latin America. 

As Charles Dallara, the managing director of the Institute of International Finance (IIF), commented: "There is less interest in Lula's visit this time, because all the attention of the emerging countries is turned to China and India, and Brazil is being left behind."

For Dallara, who doesn't know what the PAC contains, "the key for Brazil to accelerate its economy is tax reform, the reform of Social Security, a reduction of the government's role in the economy and a bigger opening."

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  • Show Comments (5)

  • usa

    Well said, Joao Carlos ! I wish for you that your words resonate throughout your country!!

  • João CarlosR Silva

    I will always believe in Brazil…
    I believe we Brazilians have to grow out of ourthird world mentality and be serious in administration. We the people have to change…

  • andy murphy

    To: nyc guy

    Your prophecy might come true. There is every chance that BRIC might drop B and go just RIC. I would be sad too,but I guess the Brazilians know what they are doing.Unfortunately, the young generation of Brazilians is very sensitive to constructive criticisms.

    After analysing PAC, I could not help laughing. Brazil went back 20 years in time. James R is correct. It does not mention anything about Tax and Social Security reforms. I might add another reform that should be done. Labor Laws. If you want to terminate the contract with your employee,you have to pay 40% fine to him and 10% to the Government of his pension fund. No wonder, Brazil has an average of 10% unemployment rate.

  • nyc guy

    A divergence at home.
    In Davos, Lula told that developed countries should not just give money to developing nations, but give them chances for a sustainable growth instead.
    The funny part is: he does the opposite at home, giving money via “Bolsa Famillia” – a social flag that is out there way before his election, and that was tied to educational compensation. That’s an easy key for re-election…
    And without cutting public expenses, there is no reasonable growth ahead. Hope that BRIC remains as it is – but if it turns out to be just RIC in the near future, I would sadly understand.

  • James R

    Harsh Reality
    Lula and his administration have a long way to go in becoming a top emerging country. Hopefully, for the people of Brasil , they will listen and make changes in their tax reform and social security.

    Concerned in Philly

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