-----Mensagem original----- De: owner-lbo-talk at lists.panix.com [mailto:owner-lbo-talk at lists.panix.com]Em nome de Doug Henwood Enviada em: segunda-feira, 28 de outubro de 2002 21:37 Para: lbo-talk at lists.panix.com Assunto: Re: Brazil's Lula Wins Huge Mandate in Watershed Vote
Yoshie Furuhashi wrote:
>Brazil's Lula Wins Huge Mandate in Watershed Vote
Ok, so what's this mean? How accommodating to the IMF will his government be? Who's advising him? How likely is it that the PT is strong enough as a party to keep Lula from getting too accommodating? Are they already reading Norman Strong's primer on how to default <http://www.leftbusinessobserver.com/HowToDefault.html>? Is there anyone here who knows Brazil?
Doug
Btw, I´m from Brazil. We don´t expect too much from Lula´s government. I will give you the following reasons. 1-The worker´s party got only 18% of the Congress representatives and other (less reliable) left center and leftwing allies got additional 15%, so he will have only 1/3 of the Congress. It will be necessary to make concessions to centrist parties if Lula want to have his policies approved by the Congress. 2-The Brazilian economy is very vulnerable, althought the current account deficit improved a lot due to heavy currency devaluation, which in turn led to a great decrease of imports (but not to a improvement in exports), so we will have a US$12 billion surplus in trade balance. On the other hand, our public debt is 60% of GNP, but it is short term and, even worse, 40% of public debt is indexed to the dollar, so the currency devaluation had a devastaing effect on public finances, furthermore, there are the high interest rates here (nominal 21%, real 10%) 3-We went to IMF three times in the last 3 years, so our budget suffers severe constraints due to the obligation of getting a surplus equal to 3,75% of GNP. The brazilian state have essentially to capacity to revive the economy by increasing public spending. 4-Our economy suffered massive denationalization. 50% of our industry is in foreign hands. -Given all those troubles, the new government don´t have enough room to maneuver. The first task, I think, is to decrease external vunerability. We need to protect our economy, avoid further denationalization, restore the state role as a planner of industrial production and decrease the interest rates. No conditions to put forward a socialist program for now. The big trouble is that our society is deeply inpatient. We have more than 50 million people living on less than US$60,00/month (PPP adjusted), unemployment is probably at 10-15% (official statistics estimates are 7-9%, but they are largely biased), so Lula simply can´t please both the bosses, the middle class and the workers, like he seems to believe. I foresee increasing social tensions and deepening political divisions in the next years. However, the alternative were to keep the same policies that led us to disaster. Btw: GNP growth rate was 2,2% in the last 8 years. Population growth is 1,2-1,4%. Btw2:Look at marxist.com (In defense of marxism) for a very lucid analysis on our elections. Btw3: I will read your reference in how to default
Alexandre Fenelon