Rui Costa Pimenta: "Brazil is one of the most vulnerable points in the global crisis"
The president of the PCO (Workers' Cause Party) believes that, regardless of the coronavirus, the international crisis was already taking shape. In Brazil, the Bolsonaro government "has no perspective" on how to confront it, he says. Watch on TV 247.
247 - The president of the Workers' Cause Party (PCO), Rui Costa Pimenta, commented on the international stock market crisis, the fall in oil prices, and the coronavirus on his weekly program on TV 247. According to him, "the oil crisis was a result of negotiations between Russia and Saudi Arabia" and it "shows the state of total fragility of the world economy."
“Brazil is showing that it is one of the most vulnerable points in the [global economic] crisis,” stated the PCO leader, reinforcing that this is “the beginning of a spiral of increasingly profound crises.” According to him, the possibility of an economic recession “is already looming on the horizon,” which will lead to “a series of very serious contradictions” that “tend to surface” along with a series of political crises.
“We are heading towards a prolonged crisis spiral, with a global economic downturn. We cannot rule out a complete stock market collapse, which is being sustained by a financial bubble that could burst at any moment. The situation is very complicated,” he stated. Pimenta cited Italy as an example, stating that “the country is paralyzed” and that it is possible that it will “completely close its borders to prevent the spread of the [corona]virus.”
However, he states that the crisis was already brewing. It would have happened without the coronavirus, which for him is an incident that "demonstrates the negative trend we are experiencing."
Brazilian situation
Rui Costa Pimenta also discussed the bankruptcy of the Brazilian state and the devaluation of the real against the dollar, stating that this could lead to an "inflationary spiral, despite the recessionary situation." He further said that, in economic policy, "the government is on the defensive," because "policy is limited to trying to avoid the crisis, to prevent it from worsening even further."
Reinforcing this point, the president of the PCO states that the government is "without a proposal for economic growth and to stem the very sharp capital flight." He also recalled that capital flight in the first months of 2020 was "greater than in the entire last year [2019]."
“And capital continues to leave, precisely because the government has no prospect of tackling the crisis,” he declared. “They are burning through foreign exchange reserves, which are large, but have a limit. The disaster is very profound, and the Brazilian exchange rate situation is going to hell. And this inevitably leads to hyperinflation.”
According to him, "the government is trying to stay afloat" and "Bolsonaro is an improvised representative of capital."
However, he states that the most important thing is to understand that "all financial issues put pressure on the country's social situation, which is very serious. Record unemployment, cuts in social services, growing poverty." "A recipe for a social explosion in Brazil," he added.