Synthesis of the Brazilian Economy
Just over a month since taking office, Lula has begun indicating what he intends to accomplish in his third term. What has emerged is not the statesman who promised to unify the country around an inclusive development project in his inaugural address. Instead, he has rapidly returned to feeding the polarization of society, setting the poor against the rich, criticizing rent-seekers and businesspeople. He has been expressing a strong urge to eliminate rules, always necessary institutional limits that protect the good functioning of democracy. For example, he has directed his ire against the Central Bank’s independence and issued a provisional measure shifting COAF (Council for Control of Financial Activities), an essential body to detect crimes of corruption and money laundering, from the Central Bank to the Ministry of the Economy. He wants to relax the law on state-controlled companies to satisfy friendly politicians, without worrying about efficiency and good governance of the “government’s companies”. He intends to resuscitate the misguided subsidized lending by the BNDES, even allowing it to finance projects in other countries, as if Brazil’s public resources were endless. The repetition of the mistakes of the Rousseff government has involved contortions from Lula to bring her back to center stage, now as an unfairly treated victim castigated by a coup. Haddad and Tebet have argued for caution, but Lula has made it clear that the final word will always be his.
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