"The wind in the world no longer blows in our favor."
In an interview, former president FHC warns about the new scenario of the international economy, mocks what he calls the BNDES's "Corporate Welfare," calls for the conviction of those accused in the Mensalão scandal, and criticizes the decision taken by Brazil in the Paraguayan case.
247 - Always controversial, former president Fernando Henrique Cardoso gave an interview to journalist André Petry, correspondent for Veja magazine in New York, in which he spoke about topics such as Mercosur, the mensalão scandal, and the new international landscape, which, in his view, no longer favors the Brazilian economy. Read some of the main excerpts:
New external perception of Brazil:
“The change began when some signs appeared that Brazil might be deviating from its previous path, with the government's sporadic interventions in the economy. Then, the trade balance ceased to be so favorable. Those who have billions of dollars invested in Brazil start to get worried. But the situation isn't as negative as it's being portrayed.”
Regarding Dilma's style in economics
"President Dilma's government is more proactive in its relationship with the market. It's state control over the market, but it's not statist. So much so that it just granted concessions for the airports. What we see is that the current government's DNA is different. President Lula tried to disguise his DNA, if he had one. President Dilma is more consistent with what she believes in. And she believes more in regulation."
The challenges of growth
“The winds in the world are no longer blowing in our favor. So, the challenge for President Dilma's government is to resume some reforms and do what President Lula's government failed to do during the period of economic growth, which is to focus on investment and savings. When the winds were in our favor, Lula focused on consumption, not production or investment. Our industrial productivity has declined compared to other countries. But it's not productivity inside the factory. It's outside. It's the roads, the cost of energy, the airports, the tax system, education.”
Income concentration upwards
“Healthy income transfer is downward, but we also have upward transfer. BNDES takes money from the Treasury and lends it to companies at subsidized interest rates. Who pays the subsidy? We, the taxpayers. It amounts to about 20 billion dollars. The Bolsa Empresa program is strong in Brazil. Brazil today is the country of Bolsa Família and Bolsa Empresa, which has resulted in general happiness. Hence the support for the government. But the middle class was left out.”
The Mensalão trial
“I am not a judge and I don’t know what the sentence should be. What I do know is that, if there is something to be corrected, and it is, it will be a historical landmark. To this day, people feel that important people can do whatever they want and not pay the price. An acquittal, if perceived as something underhanded, will reinforce that. It is a historic trial because a society is formed from symbols.”
Paraguay's withdrawal from Mercosur
"There was a lack of diplomacy, and not just in Brazil. Everyone did. If I could have intervened, I would have advised against the removal with only ten months left in the government's term. Paraguay's action was very swift, which is politically inconvenient, but it wasn't illegal."
Venezuela in Mercosur
"Also serious was Venezuela's entry into Mercosur in the absence of Paraguay. I am in favor of Venezuela in Mercosur. But it should have fulfilled the basic requirement of adopting the common external tariff."