Brazil unrest threatens economic decline: Cardoso
Former Brazilian president Fernando Henrique Cardoso has lashed out at the government’s response to a wave of social unrest sweeping the nation, warning that a mishandling of the crisis could exact a heavy toll on an economy already suffering from weak growth.
Former Brazilian president Fernando Henrique Cardoso has
lashed out at the government's response to a wave of social
unrest sweeping the nation, warning that a mishandling of the
crisis could exact a heavy toll on an economy already suffering
from weak growth.
In an exclusive interview with LatinFinance,
Cardoso said: "There is a lack of a clear vision to deal with
the crisis. I think it will have [a negative impact], because
it just increases the level of doubt among decision makers:
What is going to happen? Where is this going to lead?"
His comments - his sharpest yet on the issue - follow moves
by president Dilma Rousseff to head off the crisis, including
last week proposing a referendum on political reform as a way
to address growing public calls for an end to corruption.
Cardoso said: "The reaction of the government has been quite
strange because it only sees this from a political angle."
The former president said the commodity-fueled growth
bonanza may have run its course and that living standards have
failed to keep up with the government's rhetoric on Brazil's
He added that the protest movement reflects a deeper malaise
plaguing Brazilian society, 10 years after the rise to power of
Rousseff's predecessor, former leftwing Workers' Party leader
Luiz Inácio Lula da Silva.
Brazilian authorities are now facing "a reality shock", he
added. "There is a dual reality: what the government and the
official media say - everything is marvelous, Brazil is the
world's seventh largest economy. This is true in a way, but you
cannot forget that the society has not improved as fast as the
economy - there is a lot of insecurity, violence, the quality
of employment is not that great, the day to day life is harder
than the general picture would lead people to believe. It's a
process of cognitive dissonance, as psychologists would
Protests erupted early June following a 6% increase in
public transport fares in São Paulo, which Cardoso said
proved to be a "short circuit, which later sparked a fire".
Although the price hikes were later rescinded, unrest spread to
major cities across the nation, with mass protests expressing
outrage at the contrast between the roughly $12 billion price
tag for the 2014 football World Cup and the poor quality of
public services, including health and education.
Rousseff's pledge to boost investment in public transport by
50 billion reais ($22 billion) and to plough oil
royalties into education, following her claim to have "heard
the voice of the people", failed to quell protests. Her
popularity ratings have plummeted, according to recent opinion
A growing number of analysts suggest the BBB-rated sovereign
is on course for a downgrade next year.
The full interview with Cardoso will appear in
LatinFinance's 25th Anniversary edition, published next month.
for details. LF