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 growth miracle.
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
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 say."
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Although the price hikes were later rescinded, unrest spread to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
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. See www.latinfinance.com/quartercentury
for details. LF