Brazil: Muddy Waters, Green Shoots, No Flowers

rewrite_amazon-river-4

 

Everyone pretty much agrees that Brazil is going through another major crisis.  There is less agreement as to if and when the crisis will achieve some sort of resolution.  Personally in my experience in Brazil since the early 60’s, I cannot remember a time when Brazil was not in crisis.  We have an ongoing process of ebbs and flows dating back to discovery.  There are many explanations ranging from bureaucratic fatalism associated with the Portuguese crown, the geopolitical one derived from Brazil’s less favorable locational aspects, the racial one that blames Brazil’s underdevelopment on its ethnic mix, the political explanation derived from the lack of tradition in participation and voting, the economics due to lack of savings and investment, the educational narrative that notes the lack of functional literacy or the historic one that combines all of the above and more.  Each of these brings something to understanding but still the crises are never resolved and only change a bit in players and personalities.

With all of this, Brazilians remain generally optimistic, happy and compare their country in favorable terms to other places.  For most, Brazil remains the best place to be born and to live.  Even those that participate in the diaspora want to eventually return when things improve.  So how do we reconcile this contradiction?  In spite of violence, mayhem, disorganization, gross inequality, open thievery and poverty, Brazilians still affirm that life is good.  In spite of the recession, now extending to year 3 from 2015 to possibly 2018, Brazil still ranks in the top 10 economies worldwide as measured by GDP having dropped from 6 to 9 in the ranking.  Even so  wealth and wealth creating potential abound.

Amazingly to some, back some 30 plus years, Brazil was in a similar situation.  Jose Sarney (PMDB) was president, supported by Congressman Temer and his colleagues.  Formal unemployment was around 17%, the direct elections movement has lost its chance in 1985 but achieved the open elections of 1989 resulting in Fernando Collor’s election and Lula’s first presidential defeat.  Inflation was higher than that Venezuela’s is now topping 1000% per year.  Like Temer, Collor was called to the carpet on accusations of gross corruption.  Unlike Temer, Collor had no base in Congress and was impeached.  Although Collor had more charisma than Temer, he also failed on the economic front and his different attempts at controlling inflation are remembered with contempt and derision.  Collor’s impeachment in 1992 placed his VP Itamar Franco in the presidency and led to Fernando Henrique Cardoso (FHC) becoming Finance Minister and the implementation of the Plano Real.

In the subsequent elections, FHC trounced Lula two times.  But Cardoso’s second term was made possible by satisfying the venality of Congress (it had to vote a Constitutional amendment allowing a second term).  While the Congressional penchant for the buy off had long existed and had been condoned by the military governments and greatly enhanced by Sarney, FHC also drank from the tainted cup of expediency and now stands accused of having committed the original sin.  In this Cardoso just followed the long tradition of what he has described as “A Arte da Politica” but it is really the dirty business of sausage making, (now “nobly” carried on by JBS, the world’s largest meat processor, thanks to the generosity of Lula, Dilma and the national champion policy which started back with the military governments.)

Things change but remain the same. What goes around comes around.  Can Brazil break the cycle of miracle years followed by crisis.  Can it the country go beyond boom and bust?  My answer is an optimistic yes.  And here is my prediction, no matter how foolhardy.  Today’s Congressional vote allows Temer to survive until the 2018 elections.  The field in 2018 will include the new and the old.  Most likely, the old will win.  It could be Lula if he is not in jail or it could even be the rightist Bolsonaro the messianic ex-military Congressman who sings the praises the military and disdains minorities.  It really does not matter in the long run.  The important fact is to hold the election, gradually renew Congress, put up with whoever is elected and gradually reconstruct civil society based on meeting basic social demands in education, health, and basic sanitation.

This Congress has decided to protect itself by protecting Temer.  The President, in turn, has promised reforms and continues with in their pursuit to maintain a bit of legitimacy bestowed by the market, if no one else.  Given the horse trading that has taken place in order to keep power, it is likely that any further reforms will be more symbolic than real.  The government has already gone beyond its spending cap for this year and now is raising taxes.  Temer will end his mandate as one of Brazil’s most unpopular figures.  Clearly he desires power, is venal and shameless in his own perpetuation.  Still, there no immediate obvious better alternative.  Dilma’s impeachment solved nothing and further surrendered power to corrupt politicians.  Her one virtue was that she allowed and did not block investigations.  Temer has less personal virtue but certainly is a better political wheeler and dealer.  On the positive side though his administration at least opened space for social security, labor and spending reforms.  To all but the most obtuse, there is recognition for this need.  Delfim Neto, now the ranking academic conservative economist is not optimistic but suggests that the “least bad solution” is to let Temer “end his mission and postpone the proceedings” until there is a new administration in place on Jan. 1, 2019.

Brazil continues it herky-jerky halting progress.  In spite of the poor governance, things will gradually improve but the rate will depend heavily on how and if people decide to get involved.  The opportunities are many in civil society and even in the political realm as Temer and cohorts eventually die off.

 

Advertisements

Grading my Brazil Predictions for 2016

foto-roberto-stuckert-filho

Optimistic Dilma in 2016 – Photo by Roberto Stuckert Filho

 

Some readers have followed, not necessarily religiously, this blog since it went public in January of 2013. Comments have generally been gracious and insightful.

As long-time readers know, I do a New Year’s prediction for how Brazil will fare over the coming 12 months. As part of this, it’s only fair to go back and assess what I got right and wrong. I’m giving my 2016 predictions a gentlemanly B-. Here, for verification, is the link to those year-old predictions: https://allabroadconsulting.wordpress.com/2016/01/01/brazil-predictions-for-2016/

My biggest 2016 prediction mistake was stating outright that President Dilma would not be impeached. I sincerely believed that she could and would marshal the political forces necessary for her survival. Instead, she went down with hardly a whimper and with little or no political or economic support. . A worsening recession, growing unemployment and above all, her indecisiveness in the economic sphere and her disconnect from Congress ultimately doomed her. Her incompetence and distance even from her own party showed her lack of political skill and desire to save her presidency.

While I missed on Dilma, I predicted correctly Cunha’s (former President of House and the main force in Congress behind the impeachment) ouster and Renan Calheiro’s survival (as the President of the Senate). Mr. Calheiros has indeed prevailed but notably weakened and will soon lose the presidency of the Senate. The new President, Michel Temer, has kept his distance from Calheiros preferring other cronies instead. In my predictions, I did not mention Temer (as I did not think he would actually take over) and I should have looked at his ambitions more closely.

On the economy, like most everyone, I correctly anticipated the continued recession but also expected the cycle to reach bottom by the end of the year and naturally perk up from there. It now appears that the upswing may not begin until the second or third quarter of 2017. The recession, the major increase in unemployment and the consequent lack of demand has kept inflation relatively low. I had expected inflation (again with Dilma) to hit or top 10% due to her maneuvering to please supporters. President Temer has pushed a cap on spending through Congress and this along with lack of demand has held inflation to around 6.5% in 2017 with a current tendency to fall. Brazil’s Central Bank is predicting inflation of less than 5% in 2017. While the official numbers appear reasonable, the impact of price increases certainly feels higher and more worrisome on the street.

Speaking of worrisome, Brazil is mastering the art of year-end crises. It used to be mudslides with summer rains creating havoc. These were largely man made catastrophes because of unregulated and uncontrolled development of unsafe areas. Because the deadly slides were associated with the seasonal downpours, they could be blamed on nature. Similarly, Zika was the New Year concern from 2015 to 16 when thousands of cases appeared and hundreds of babies were born with microcephaly. In this case, nature again was blamed but Brazilians also know that mosquitoes breed and propagate due to a lack of basic infrastructure and sanitation. By August and the Olympics, the pandemic was no longer an international threat and Brazil, as I predicted, successfully held the Games. Of course, the major beneficiaries were not the people of Rio but instead NBC and the Olympic Committee. Rio is now bankrupt and many of the so-called Olympics improvements are rapidly falling into disrepair. This 2017 New Year disaster cannot be blamed on nature but must be laid at the heart of the contradictions inherent in Brazil’s barbaric inequality and violent past. Prison riots in the first days of the year have caused well over 100 deaths and the government seems paralyzed in how to address the gangs that control the prisons, their historically abhorrent (mis)management, and the Justice system itself that operates willy-nilly and condemns the poor, black and powerless. The rebellions and deaths show the bankruptcy of the government and paradoxically the strength for those who have nothing to lose and know that life is cheap. The gangs rule in the absence of any other intervening power.

Last year, I also mentioned the continuity of the corruption investigations and, especially the Lava Jato (Car Wash) with its revelations of unprecedented bribery and the chummy network of exchanges between construction companies, politicians and political nominees positioned to take bribes and distribute contracts favoring the “empreiteiras” (construction companies) and their political allies.   Again, thinking that Dilma would hold on to power, I imagined the extension of the investigations to other areas such as the National Development Bank (BNDES) and more specific projects like the transposition of the San Francisco River. Indeed, there has been mention in this direction but no action. Instead, the Temer government sought to quietly dismantle the main investigations and it has only been through strong public pressure within Brazil and from abroad including the US Department of Justice that the prosecutions actually survive.

Interestingly as predicted, Brazil continues to receive massive amounts of FDI (Foreign Direct Investment) some 69 billion in 2016. Some of this money is going into the primary sector for land purchases, soybean and pulp plantations. Other sectors are less clear, with industry in decline, the money is likely going to opportunistic acquisitions in manufacturing or processing (i.e. the Petrobras sale of the notorious costly refinery in Pernambuco negotiated recently for 10 cents to the dollar. Other investments are going into education, services, distribution and logistics. Still these have not sufficed to revive the economy. More money is starting to come from China but the Chinese still lack confidence in how to deal with Brazil.

Unfortunately, Dilma’s ouster is still yielding negative returns for Brazil’s institutions. While she was bad, her replacement has not improved the economic situation, slowed the firings, enhanced productive investments or inspired confidence. Dilma, though apparently personally honest, could or would not govern.   President Temer’s rectitude is perhaps less certain. His government is corrupt and weak but more politically adept in dealing with the venal politicians in Congress. Hopefully, the electoral court will not have time to disqualify the Dilma/Temer slate, which would force Temer out and the indirect election of a new interim president who would have filler role to the elections of 2018. If this happens, it will further confuse the public and inhibit the possible emergence of candidates not tied to corrupt schemes or past malfeasance.

Pulling off the Olympics and winning the missing gold medal for the first time in futbol* were the high points, and now Brazil continues to flounder but such is the world in 2017.

*The Olympic gold medal was only major soccer title that Brazil had never won.

A study in shallowness: Donald Trump by Karl E. Scheibe

shallow-1

I am posting an article by my brother, Karl.  He is Professor Emeritus of Psychology at Wesleyan University and a practicing clinical psychologist.  Here is the article, with his permission.  I included the above cartoon on my own initiative.

In order to develop an understanding of psychological depth, it is useful to explore the opposite of such depth—individual shallowness.   My choice of a subject for this analysis is arbitrary but not capricious.  Donald Trump provides an obvious and current case study of what is meant by human shallowness.  All of what I say about him, of course, is based upon my reading of what he has said about himself and about what others have said.  I have never met the man and have no claim to special insights about his character.  But he has chosen, in becoming a candidate for President of the United States, to lay himself open to be known and evaluated.  Information about him is plentiful—but obviously partial and incomplete.  With this caveat, I can at least provide some reflections on the version of this man that has been projected to the great public.

The New York Times has published an account of five hours of recorded conversations with that took place two years ago—before his run for president.[i]   The interviews reveal a person who is obsessed with his own celebrity, someone who has a morbid fear not so much of failing as of being either ignored or embarrassed.  He contends that he does not engage in much personal analysis, for “I may not like what I see.”  He has a willful lack of interest in history, does not read books, is impatient and has a limited range of attention.  He is distrustful with other people and does not, in general, respect others—because he does not view other people as warranting his respect.  The interviews recount an episode in which he became angry at his former wife, Ivana, because of her skill at skiing, which made Trump’s ability appear to be inferior to hers.

After the records of Trump’s practice of engaging in unwanted sexual advances to women, he at first denied having actually taken such liberties.  These denials were, of course, met with testimonies of such advances by many women, which in turn were branded by Trump as false.

These and other details of Trump’s life reinforce the conclusion that he is properly described by two closely related disorders:  Histrionic Personality Disorder, and Narcissistic Personality Disorder[ii]

Here are the prime diagnostic criteria for the first:  Histrionic Personality Disorder

  1. Is uncomfortable in situations in which he or she is not the center of attention.
  2. Interaction with others is often characterized by inappropriate sexually seductive or provocative behavior
  3. Displays rapidly shifting and shallow expression of emotions
  4. Consistently uses physical appearance to draw attention to self
  5. Has a style of speech that is excessively impressionistic and lacking in detail
  6. Shows self-dramatization, theatricality, and exaggerated expression of emotion
  7. Is suggestible, i.e. easily influenced by others or circumstances
  8. Considers relationships to be more intimate than they actually are

(p. 714)

And here are the criteria for Narcissistic Personality Disorder

  1. Has a grandiose sense of self-importance
  2. Is preoccupied with fantasies of unlimited success, power, brilliance, beauty or ideal love
  3. Believes that he or she is “special” and unique and can only be understood by, or should associate with, other special or high-status people (or institutions)
  4. Requires excessive admiration
  5. Has a sense of entitlement, i.e., unreasonable expectations of especially favorable treatment or automatic compliance with his or her expectations
  6. Is interpersonally exploitative, i.e., takes advantage of others to achieve his or her own ends
  7. Lacks empathy: is unwilling to recognize or identify with the feelings and needs of others
  8. Is often envious of others or believes that others are envious of him or her
  9. Shows arrogant, haughty behaviors or attitudes

(p. 717)

My argument here is descriptive and is not an attempt to be explanatory.  I am not asserting that Mr. Trump has behaved the way he has because he “has” these personality disorders.  But I am asserting that his behavior fits these descriptions with uncanny accuracy.

Over the century of its modern evolution, psychology has developed an extensive amount of experience in noting the behavioral characteristics of human beings that go together.  The current edition of the Diagnostic and Statistical Manual of Mental Disorders lists ten categories of Personality Disorders.[iii]  The two personality disorders that fit Mr. Trump so well are the ones that correspond to the opposite of individual depth.  A person who is deep would also be a person of learning, historical appreciation, human sympathy, understanding, thoughtful, caring, altruistic, forgiving, and modesty of bearing. The figure of Abraham Lincoln comes to mind—the first Republican presidential candidate provides a neat antithesis to the most recent one.

How then could such a shallow person win election as President of the United States?  A proper response to this question demands a consideration of context.  A major part of that context is that the election of 2016 was preceded by eight years of Democratic rule.  Also, Trump’s opponent, Hillary Clinton, had already spent eight years in the White House—and her return would be another Clinton presidency of which we have already had eight years, within living memory for most of the electorate.  Finally, Mr. Trump, in addition to being a shallow person, is without question a large person—filling the stages on which he stood, and manifesting a style that was, in many ways, that of the anti-politician—disregarding convention, propriety, good manners, and standard rules of political conduct.  He was also preceded by the first black president in our history—and let us conjecture that a generalized and pervasive racism in our nation might have potentiated a reaction.  Withal, the drama of everyday life demands change and abhors boredom.  Trump’s very shallowness of character allowed him to act out a defiant and compelling attitude of bold change—and our electorate buried its sullen reserve, and came out to choose him in unprecedented force.  The drama of history is inherently unpredictable—which is why it is worth watching.

A paradoxical advantage of having a man as President who is quite shallow is that he has no deep commitments to any action, cause or purpose that might require him to do or say something that could bring trouble.  Conservatives have been deeply suspicious of Mr. Trump because of his vacillations on matters such as abortion rights, gun control, and immigration policy.  My own conjecture is that Mr. Trump has nothing that would count as deep commitments on these or on any other matter of public policy.  His motivation for action has derived in the past from whatever actions might best serve his own private advancement or gain.  This will continue to be the case.  This means that as the external winds blow, so will Mr. Trump’s commitment to policy change.  I do not particularly fear his having access to the nuclear codes, for as a practical matter, no personal objectives could possibly be served by resorting to the use of nuclear weapons.  He has all of the attention and glory he needs, and is assured of this continuing for the next four years.  He will go with the flow in his presidency so that he might continue to bask in attention, doing nothing to jeopardize the heights he has achieved.

 

 

[i] See Michael Barbaro, nytimes.com/2016/10/26/us/politics/conald-trump-interviews.html?_

 

[ii] See DSM-V, the Diagnostic and Statisistical Manual of the American Psychiatric Association,

[iii] These are considered to be Axis II disorders, under the multiaxial system of classification. “A personality disorder an enduring pattern of inner experience and behavior that deviates markedly from the expectations of the individual’s culture, is pervasive and inflexible, has an onset in adolescence or early adulthood, is stable over time,  leads to distress or impairment. (DSM-IV-TR, p. 685)

 

 

 

Elections and Democracy in Brazil

img%2520src%253durna%2520eletronica

Brazil’s first round of municipal elections was completed on Sunday, October 2nd and there were no major surprises.  Lula’s PT party took a drubbing and the results were somewhat favorable to President Michel Temer’s government although the PMDB did not win, show or place in any of Brazil’s top 3 electoral zones (Sao Paulo, Rio de Janeiro and Belo Horizonte).

Brazil’s mix of the advanced and the archaic certainly comes out in voting.  The vote count was done by computers minutes after the polls closed but those elected succeeded not so much because of their brilliance, competence or party affiliation but instead because of their personal appeal. Marcelo Crivella, an evangelical songster placed first for the run off in Rio. The well-known soccer player Joao Leite came in first in Belo Horizonte and faces the second around against the former president the favorite home futbol team.   Joao Doria, elected outright in Sao Paulo, aside from being a millionaire publicist is also an ex-TV personality who used to host a program analogous to Trump’s Apprentice.  Examples of entertainment and popular culture mixed with politics much like in the USA.  Globalization of politics is all around.

As in North America, wealth, name recognition and being able to convincingly pitch what the people want to hear are important to winning elections.  Still Brazil is different.  In the US there are only two major parties and two “want to be’s” (Libertarian and Green) while in Brazil there are over 35 parties with a complex system of summing party votes to favor a slate and to gain resources.  Republicans and Democrats diverge on social causes, sexual equality, women rights and climate change but in Brazil party separation at the municipal level is not based on programs but on the person.  In Sao Paulo, Lula’s favorite Fernando Haddad tried to walk a thin line between leftist PT politics and efficient spending and use of resources.  In doing so he lost the vote of the poor, which wound up diluted.  Doria was elected in the first round with over 50% of the vote compared to some only some 17% for the PT incumbent.

In Brazil, voting is required by law.  Suffrage has now been extended to 16 year olds as compared to the existence in the 20th century of literacy, age and gender requirements which helped preserve the primacy of the white patriarchy.  Today, Brazilians recognize themselves as a mixed race society and only 48% of the population self describes itself as white, yet over 70% of the elected mayors and council members are Caucasian men.  Traditions are strong and difficult to break.   In the run up to the first round, there were over 20 political assassinations.  Some of these were vindictive small town type feuds but many were related to the drug trade and the preservation of gang influence and territory.  This is a major area of concern in Rio and other big cities.  The situation is not yet like Mexico where the narco-cartels control whole towns and outlying areas but it is something that could occur with the weakening reach of the state.

Elections are important in Brazil and the process and campaigns in the election cycle are important civic activities.  Voting contributes to building civic society and institutions.  These municipal elections were the first where corporate contributions to campaign financing have been prohibited.  In theory, the process is becoming more “democratic” but the prevailing levels of education and the influence of the broadcast media still strongly impact the public perception of the candidates.  Moreover, Brazilian politics reflects the overall level of critical thinking and debate in society.  Certainly, important information on the candidates, their backgrounds and their programs are available and debate is intense and widespread.  People vote their interests based on information and perception.  The effort to be informed and to think is undoubtedly cumbersome and time consuming.   In a situation where people are working long hours to meet ends meet and have little time and cynical view of politicians, the challenges of building institutions and civil society are immense.  But, in the end, it is better to have elections, have voters and the whole process, but at the same time patience with the results.

The short term impact is pretty much business as usual in Brazil.  Populism, personalities and personal contacts and special relationships permeate the system. There are no new or exciting faces readily apparent for the future.   Politics as the means for ordering power still has its draw.  Individuals and organizations strive to promote ideas and interests through the political process and this is particularly important at the local level where streets need to be fixed, sanitation services need to be installed, schools need to function, streets need to be policed and growth needs to be guided.  In the long run, electoral participation should build political institutions.  Former President Dilma Rousseff’s successor, President Temer’s party had the largest number of candidates but the PSDB was more successful in getting people elected. And while the PSDB came out as winners overall, the party is seriously divided between its more social democratic branch and the more conservative elements elected in the city of Sao Paulo.

Brazil needs a political reform to reduce the number of parties and to make them more representative.  Whether Congress can come to this same conclusion remains to be seen and the next big political test will be the general election in 2018.  Given the current situation with a President of questionable legitimacy, it is unlikely thatany major political reforms will take place until after 2018 vote.  At this point, the jockeying is on to see who can emerge as a viable candidate.  President Temer should be ineligible in two years, but if he achieves legitimacy through economic success, the Brazilian politicians can likely find a way to qualify him.  Lula, while under indictment on various corruption charges still is the most charismatic and electorally popular figure.  The PSDB will have the nearly impossible task of finding a unity candidate with the ongoing competition involving Aecio Neves, Jose Serra, and Geraldo Alckmin.  Marina Silva, who came in third with a surprisingly strong showing in 2014 is currently floundering.  Personalities prevail over programs as the Brazilian system gradually evolves with each cycle.

In with the Old

republica-velha-1

Institutional gymnastics in Brazil deserve a gold medal. Politicians orchestrated a slick maneuver that led to President Dilma’s impeachment but saved her, at least temporarily, from the loss of the right to hold political office in spite what the Constitution mandates. This bit of political chicanery orchestrated by Renan Calheiros, the Workers Party (PT) and Supreme Court Justice Lewandowski, and likely sanctioned by President Temer, amply illustrates the permanence of Brazil’s political culture of accommodation and innovation through the use of the “jeitinho”.  The move further weakens respect for the Constitution, the Supreme Court and the overall political process.  In the end, it means institutional degradation and for anyone looking from the outside in, they can only scratch their head and wonder if Brazil will ever have rules that apply in a universal fashion.  If you are a foreign investor thinking about playing in this trillion-dollar market, what is your impression?

The impeachment (with attenuation) raises basic questions that demand answers: Is Brazil’s culture perverted in such a way that institutions cannot solidify and function? For how long will the Brazilian political body be subject to the whims and wiles of manipulative and astute members of the political elite?  Why do the major economic players condone and acquiesce in such ad-hoc maneuvering?  What is necessary for institutional stability and growth?

The short answer goes back to Brazil’s historical heritage, the weight of slavery and patrimonialism. Brazilians are aware of and frustrated by contemporary anecdotes about the difficulty of encountering the promised future.  Some say that Brazil needs another 500 years to shake off the elitist centralization inherited from the Portuguese crown plus another plus another 500 years to remediate the sins of the world’s most intense slave trade.  In 1800, slaves made up more than half of Brazil’s population and Brazil still has the largest share of African blood in the Western world.  Paradoxically, miscegenation, partially driven by demographics, led both to the myth of racial democracy but also reaffirmed Brazil’s unequal distribution of power and property based on racism.  “White” society prevailed over the many gradations of darker and poorer.  Brazil took its time in abolishing slavery (1888) and even by the end of the Empire (1889), suffrage in the newly proclaimed Republic favored the rural based patrimonial elites who could control “their” people and guide the limited suffrage that would come into place.  Illiterates were barred from voting and education was restricted, thus favoring the status quo.

From the abolition of slavery and the Republic to the present day, the vestiges of the system remain in place.  Even the shift of population from 90% rural in the 19th century to 90% urban in the 21st has only slowly, extremely slowly, begun to reverse this inheritance.  Brazil remains stubbornly unequal in education, income and the distribution of power and participation. This unevenness can be seen along the racial spectrum from white to black, rich to poor, the privileged to the destitute, from those who live in hillside favelas to those with beach-front homes.

Even as Brazil industrialized, urbanized and made great strides in wealth generation and economic opportunity, social advancement remained highly dependent knowing the right people.  Brazilians always have had to value what is called a high IQ or in Portuguese, Quem Indica – Who do you know?  Years ago, young women aspired to marrying a functionary of the Bank of Brazil and today young people are still avid seekers of employment in the public sector and preferentially to a post based on personal referral.

Since the 1930’s and even before, economic development has been state led.  Those with political power and those able to create economic surplus looked to the government for investments, loans, incentives, protection, and the benefits to be derived from positions and sinecures in state run enterprises.

With power and resources, those in government treated society and the population in a paternal and/or populist manner. Look at how members of Congress members of the president’s administration behave. Their policies and favors are for friends and family.  Although society and the economy have grown in sophistication and complexity, the political system remains largely traditional.  It is and always has been the duty of the governing to anticipate, control and genuflect toward popular demands.  In Brazil, the government has a long history of signaling and promoting social and economic benefits.  Thus today’s labor code (CLT) with its roots in the Estado Novo dictatorship provides Brazilian workers with the benefits of European social democracies before these were actually demanded and negotiated in a political struggle.  Cooptation and control prevailed over political mobilization and the winning of rights through active political participation.

While Brazil is a capitalist economy, nothing gets done without the government.  Statist ideology, state capitalism, state control and intervention are all too present.  Brazil needs to decide the role of the state in the 21st century economy.  Dilma was ejected because the state fell down on its ability to perform and coopt.  The new President promises changes and is trying to promote a more traditional style of capitalism with competition, rules, private property and the right to profit.  However, the current system is stacked against this.  And while, the Worker’s Party has expanded the state as an employer since 2003, this tradition started much earlier with entrenched interests in the state with its tentacles in all sectors is difficult to budge.  Politicians don’t want to change as they can allocate resources in the form of jobs and benefits.  Those on the receiving end or even potentially on the verge of power also lack incentive to change.

Economic complexity, a population of 210 million, a GDP that has shrunk to less than 2 trillion, societal diversity and increasing yet still poor levels of education are all factors demanding a new model.  Not much will happen with President Temer.  He has only one bullet and that is to somehow revive the economy and this will be a challenge.  Moreover, his term is too short and if he tries to run for reelection in 2018, that act will trigger another crisis.  Brazil needs to find leadership but the population also needs to decide on a future where the state has a greatly reduced role in collecting and allocating resources.  Because this will involve pension reform, tax reform, privatization, de-bureaucratization, losses of access to easy jobs and privileges, the process can only take place over a long time frame.

It remains to be seen if the old can survive until the future arrives.

Article by Ex-President Fernando Henrique Cardoso

This article was originally published in the Estado de Sao Paulo and republished by Brazzil.com

Unfortunately, it reads like Google translate but if you know Portuguese you can read it profitably to the end.  The trouble is that FHC is engaging in the 2014 political campaign and raises issues that his administration could have and should have addressed better especially those ideas and issues related to infra-structure and Brazil cost.  Brazilians like to say this is the dirty talking about the unwashed (o sujo falando do mal-lavado). 

The debate between the PT and the PSDB or between the center left and the left of center is not really producing any results.

Here is the text:

Can’t We All Get Along in Brazil? Otherwise We Will All Sink Together PDF Print E-mail
2013 September 2013
Written by Fernando Henrique Cardoso   
Tuesday, 03 September 2013 15:34
 
 

Fernando Henrique CardosoIt does not take a lot of imagination, and you won’t need to get into details, in order to realize that we are experiencing a difficult phase in Brazil. Let’s start, however, by the international situation.

The events open increasing spaces for the emergence of important regional influences. Even the mess in the Middle East, from which the United States come out with less and less influence in the region, increases the Gulf monarchies’ capacity for action.

They have money and want to preserve their authoritarianism, the same going for Iran, which makes a counterpoint. The struggle between Wahhabis, Shias and Sunnis is behind almost everything. And Turkey, on the other hand, finds gaps to dispute hegemonies.

Meanwhile, we keep losing spaces of influence in South America. Our diplomacy, paralyzed by the undeniable fondness of the “Lulopetismo” for the “Bolivarianism,” zigzags and stumbles. Now we give in to illegitimate pressures such as the recent one from Bolivia, which wouldn’t give a safe passage to someone who asked asylum in our embassy.

Sometimes we are the ones putting undue pressure, as in the case of Paraguay’s withdrawal from Mercosur and Venezuela’s entry. At the same time, we pretend not to see that the “Pacific Rim” is a counterweight to the Brazilian inaction. Diplomacy and government without a clear will for regional power, stunned officials and fiascos everywhere – this is the balance.

What about the energy issue? The plants expansion is delayed and there’s no real support from the private sector, except for building them. Electricity companies are broken, thanks to regulations, which even when necessary are done haphazardly and without looking at the long-term interests of investors and consumers.

Petrobras, now in the hands of someone more competent, has very little credit available to invest and has little money due to the low price of gasoline. What was loudly proclaimed by president Lula, the self-sufficiency in oil, vanished with the increase in the deficit of gasoline imports. Now, with the American revolution of the shale gas, who knows where it will stop the equilibrium price of oil to be extracted from the pre-salt?

As for the issue of infrastructure, after a decade of delay in the submission of tenders for roads and airports, besides some botched attempts, the government became inventive: now privatizations are made, disguised under the name of concessions, with the government offering cheap credit to interested private companies. Money, it should be said, from the National Bank of Economic and Social Development (BNDES) – with interest subsidized by the taxpayer – and, moreover, the government offers to use private banks for the undertaking.

Who knows what kind of benefits they have to be offered in order to get into the PAC’s (Growth Acceleration Program) rhythm, ie, slow and poorly done. These are all unheard of: concessions receiving pecuniary benefits yielding nothing to the government, like the railroads whose builders received cash allowances per mile built. There is only a place where this could happen: Gabriel García Márquez’s surrealist Macondo. I hope that, here, the solitude of executive disability and financial mismanagement will not last one hundred years…

If we turn to macroeconomic management, the back and forth is no different. The industry, they used to say, does not export because the exchange rate is unfavorable. Now we had a megadevaluation of over 25%. If we don’t do anything to reduce the structural weaknesses and inefficiencies of the Brazilian economy, and if the government does not have the courage to prevent that the devaluation become inflation, the new level of the nominal exchange rate will be of little help to the industry.

Before, the pro-government crowd used to boast about low interest (“Ah, these tucanos – toucans, PSDB party politicians – always hand in hand with high interest rates!” They used to say). Suddenly, it’s the PT (Workers Party) administration that leads the new onslaught of interest. And they won’t learn that it is not the will of the ruler that dictates the rules on interest, but many conflicting wills battling it out in the market. They can’t look at their own navel.

I’m tired of writing about these and other evils. Every day the media reminds us of the deficiencies in providing services in the areas of education, health and safety. Let’s not even talk about the follies about political party’s life. Just look at the last one, keeping a congressman in the House who has been sentenced by the Supreme and is already in jail!

Nevertheless, given the extent of the breakdowns, it seems inevitable to recognize that the central issue is leadership. I say this not to accuse a person (it’s always easier to blame the president or the government) or any party specifically, although it is possible to identify responsibilities.

It is fair to recognize, however, that the mismatch, the knocking of heads within and between the parties, leads more to uproar than to the creation of paths. This brings a naive question: can’t you utter a collective mea culpa while keeping our political and even ideological differences, realizing that when the ship sinks we all go down together, government and opposition, employers and employees, those who are at the helm and those who are at the stern?

It  takes greatness to put people’s and the country’s long-term interests above the disagreements and to agree on some reforms (a few, not many, just partial, not global) capable of creating a better horizon, starting with the one dealing with parties and election since the ukase presidential failed in this matter, as expected.

If those who lead the government have neither vision nor the necessary strength to talk to and in the name of the country, at least the opposition starting now should cease the infighting and bridge the differences between parties. Only thus, forming a reliable block with a strategic vision and able to follow practical paths, we will build a more prosperous, decent and equitable society.

Fernando Henrique Cardoso was the president of Brazil from January 1, 1995 to December 31, 2002. This article appeared in O Estado de S. Paulo.

 

Protests End but Challenges Remain

Ok, it may be a bit premature to declare the end of Brazil’s protest movement.  After all, we’re still on the count down clock to the World Cup and then the Olympics.  With Brazil on the world stage for a short time, many undoubtedly will want to take advantage of the spotlight.

The protests of the past 10 days have been very healthy overall and a tonic for Brazilian society.  The last time we had something on this scale was in 1992 with the impeachment of Fernando Collor.  Before that, protesters were calling for “Diretas Ja” (direct elections) in 1985.  And, before that, you had to go all the way back to the 60’s and the military dictatorship when there were student-led demonstrations in defense of Jango (President Joao Goulart – Brazil’s civilian president) and the conservative counter-movement in defense of tradition, family and property, and ultimately in support of the authoritarian military solution that only ended in 1985, partially because of public protests.

In the the 1970’s and 1980’s, the objectives of protesters were  easier to identify.  Military generals were in uniform and wearing dark sunglasses.  There was censorship, arbitrary acts and political arrests on the part of the military sometimes followed by torture.  Direct elections and a constituent assembly were the immediate goals of protesters on the path toward democracy.

Almost 20 years after the end of military governments, Brazil is still under construction or as the protesters have stated on their placards: “Please excuse the noise, but we are building our country.”  Indeed, civic movements, public pressure and a renewed interest in power (politics) contribute to the institutional building process.  This is a  slow process. Those impatient have to recognize that things take time, especially given Brazil’s political history and heritage.

The protests will come and go.  They will slow down now as the Confederations Cup comes to an end and as those in the streets see that their message has been delivered.  The diffuse nature of the movement also contributes to the sporadic nature of the protests.

It has been great to see so many groups demanding recognition and change. However, there is a tendency, especially on the part of the press, toward (mis)characterization of the movement by emphasizing the more sensational.  Certainly, the Parade of Sluts (Desfile das Vadias) provokes a certain prurient interest. But that is probably not the lasting thrust of the movement.  Perhaps the groups protesting against the homophobic president of the Congressional Human Rights Commission are more spot on.

Brazilians love to joke and increasingly the “passeatas” are becoming the target of cartoonists and humorists.  This is also fine but indicates to me that the movement is being taken down a peg in terms of “seriously” contesting the regime.

Civic participation in Brazil is more active now.  However, polling and analysis of the protesters shows they are wealthier and better educated than average Brazilians.  This, in turn, shows that mass participation is probably more sporadic than many want to admit.  Moreover, political fissures between the left, right and within left and right are becoming more and more visible.  There are a lot of people out there calling for things such as the closure of Congress and the revocation of Congressional terms.  These people seemingly fail to recognize the role of parties and the validity of elections in the democratic process.  When people step back and soberly evaluate, the limited nature of street protests becomes more apparent.

All in all, the protests will ebb and flow more in reaction to immediate events.  They will likely slow now and reemerge as next year’s Cup approaches.