International Periscope 26 – A view of Brazil

August 2008


The opinion polls show that the majority of the Brazilian population still hasn’t chosen the mayor and councilman/woman they are going to vote for.

The election will occur on the first and last Sundays of October (on the second date, only in cities with more than 200,000 voters, unless one of the candidates obtains, in the first round, 50% plus one vote of the total valid votes).

An important variable, from today to October, is the beginning of the free electoral broadcasting program: as of August 19, Brazilian television and radio stations start to air the electoral program of the different electoral campaigns.

Pursuant with the Brazilian legislation, the free electoral program on radios and televisions is done in the following way:

a) in the elections for Mayor and Vice-Mayor, on Mondays, Wednesdays and Fridays; from seven AM to seven-thirty AM and from twelve noon to twelve-thirty, on the radio; from one PM to one-thirty PM and from eight PM to eight-thirty PM, on television;

b) in the elections for Councilor, on Tuesdays and Thursdays and on Saturdays, following the same schedules as explained in the preceding item.

The allocation of advertising space is guaranteed to all political parties and coalitions with a representation in the Federal Chamber of Deputies, pursuant with the following criteria:

a) a third of the time is divided equally between all parties;

b) two-thirds of the time is divided proportionally to the number of representatives in the Federal Chamber of Deputies, considering, in the case of a coalition, the sum total of the number of representatives of all the parties forming the coalition.

Evidently, not every Brazilian municipality has a television broadcasting company. Yet the free electoral program plays a critical role in the result of the electoral campaigns, especially in the country’s 79 main 79 cities (state capitals and cities with more than 200,000 voters, all cities that have TV broadcasting or relaying companies).

For the second round, forty-eight hours after the first-round results have been announced and up to two days before the second-round runoff election, there will also be a schedule for airing free electoral advertising.

More details on the electoral broadcasting programming can be obtained at the following electronic address:

The free electoral broadcasting program influences every layer of the population and reaches the 128 million voters eligible to vote in October, in 5,563 municipalities.

Early in September we should have a clearer picture of the trends for this year’s municipal election, which involve 52,000 offices and some 400,000 contestants. And it will be possible to speculate with more confidence about the bearing of these elections on the 2010 presidential election.

Today there are contradictory trends. On the one hand, the Lula government exhibits immense popularity and the Workers Party (PT) has the support of 25 percent of the electorate. On the other, the ruling parties’ pre- Presidential Candidates (especially those of the Workers Party) still exhibit a weak performance in the electoral opinion polls that are already being done on the 2010 presidential elections.

This contradiction encourages, in the opposition, a climate of “assured victory” in 2010. But should the PT, the leftist parties and the ruling parties come out reinvigorated from the 2008 municipal elections, this will most likely reflect positively on the performance of the ruling parties’ candidates to the 2010 election.

Only to hypothesize, what will be of the social democratic PSDB toucans if the party loses the mayoral elections in Belo Horizonte and Rio de Janeiro?

Speculating on the rightwing opposition reactions to such a scenario is Wanderley Guilherme dos Santos (Valor Econômico newspaper, July 11, 2008):

“From the climate in gestation in this run-up to the mayoral elections, I fear that the present opposition will resist accepting another defeat in 2010, should it happen. The systematic diffusion of the thesis that the government does not have a viable candidacy and, thereby, that the opposition is likely to win the next presidential election contributes to crystallize in the oppositionist electorate the sentiment that only by illegal arts or institutional vices the incumbent government shall be ratified by the electorate. The current apparatus set in place by the toucan partisanship inside the media will make it easier, as in previous opportunities, to deploy the arsenal of coup d’etat-inspired theses they have in store. For that reason, the oppositionists’ reaction to this year’s results in the mayoral elections might cast a light on what they intend to do in 2010.

“The novelty is the enormous distance between the public opinion –favorable to the government– and the growing oppositionist optimism, founded on polls on hypothetical candidacies. As the newspapers and the magazines think alike, their editorialists and commentators believe the whole population thinks like their colleagues sitting at the next desk, regardless of the first page polls splashing the contrary. A chorus of deluded is created that spills over to the opposition’s slice of the electorate, prompting the latter to believe in the certainty of imminent victory. There lies the peril”.

“In the quite plausible hypothesis of a fierce contest and a tight win by a PT candidate or a candidate supported by the PT, how will the prophets of the apocalypse react?”

“A defeat of the oppositionist faction, particularly if it is by a minute margin of votes, has everything to reactivate the historical inclinations of the conservatives for extra-legal solutions”.

Wanderley Guilherme’s reflection prompts consideration of two key issues:

a) the compatibility between capitalism and democracy, especially in this setting of international uncertainties and changes in the political geography of Latin America, and;

b) are the actions by the popular-democratic camp and the public policies developed by the Lula administration enabling the (social, economic, political and cultural) consolidation of a social base capable of fighting, electing and upholding a third left-of-center term of office?

Let us see, from this angle, some of the happenings and polemics that have marked the month of August, in the context of the armed forces, the media, the social movements, the middle sectors, the economic policy and the foreign policy.

Armed forces“The mistake was to have only tortured and not killed”, said federal deputy Jair Bolsonaro to demonstrators that were protesting outside Rio de Janeiro’s Military Club, on August 7.

Follow the link to watch part of the demonstration:

The representative’s statement, a spokesperson for the military hardliners, reveals the temperature of the confrontation opposing, on one side, the Ministry of Justice and the Special Secretariat for Human Rights of the Presidency of the Republic, and on the other, a portion of the Armed Forces.

At the center of the confrontation is the interpretation of the 1979 Amnesty Act. For the human rights movement, as well as for family members of those arrested, killed, missing and tortured, that the Amnesty does not apply to the crimes of torture and “disappearance”.

To the military right wing, the Amnesty would apply to “both sides”, yet forgetting that one of the sides was punished (with a greater rigor than that set forth in the “laws” of the dictatorship), while the agents of the State who were responsible for crimes were not punished.

While the ministers of the Lula administration called a seminar to debate legal aspects related to the theme, the military held a public meeting called by the presidents of the Naval Club, the Military Club and the Aeronautics Club.

Attending the meeting were former State ministers, Navy, Army and Air Force active-duty and retired generals and other officers, public authorities, associates and guests.

According to the message released by the presidents of the three forces, the meeting “was held with the purpose of offering an opportunity to discuss a theme that, besides being up-to-date, carries in itself a considerable weight of polemic: the Amnesty Law, sanctioned in 1979, which aimed to allow for the pacification between Brazilians of diverse ideological tendencies, particularly the functioning of a full-fledged democracy in our country. According to a suggestion by those who at the time opposed the government, it was sweeping, comprehensive and unrestricted (ampla, geral e irrestrita). It caused awe, for that reason, the extemporaneous and out of purpose initiative of the ministers of the incumbent government once again to discuss a law whose positive effects had been felt for a long time. It was a disservice rendered to Brazil and surely, to the very government they belong to. If there had really been an interest in debating the national problems, the two ministers should opt for a more up-to-date theme, one that bothers with greater intensity: the countless scandals staged by figures of the government’s top hierarchy or, even more recently, the very grave suspicion of involvement of some of them with the FARCs. It should be made very clear that the reason for this seminar is not to defend torture or personal attacks to anyone at all, but to debate a law that instituted the forgetfulness of reproachable acts that may have been committed, as well as of hideous crimes perpetrated by militants of the terrorist organizations that proliferated at that time”.

The gathering lasted two hours, with three speeches, among which one made by (reserve) general Sérgio Augusto de Avelar Coutinho. To the general, “after the Soviet collapse, Gramci’s concept has been the option of the revolutionary left, the democratic way to socialism is the substitute for Kruschev’s peaceful way. In practice, this strategy has been conducted by two main endeavors, be heedful because they are evident, yet we do not see them: first, the intellectual and moral reform of society, in Gramci’s expression, in which are engaged organic intellectuals and intellectuals permeating literature, artistic manifestations, [college] chairs and music. New ways of thinking, feeling and acting. The second endeavor is radical reformism, very well explained in an article by the incumbent minister of Justice, written three years ago, which is the transition to socialism itself, to which two things are necessary, that are right before our noses, sorry for the candidness of the expression, are evident, which are: continuism in government and the occupation of the State, i.e., the construction of the revolutionary apparatus. Revenge seeking is instrumental. It will please the ego of revenge seekers, though it is actually opening a way to revolution. And I say that in Brazil there is a socialist revolutionary process in progress, subtle and masked, with a democratic appearance, violating or spreading the violation of the basic principles of Law, with all the simulation of respecting the democratic state.”

Attending the act were two active-duty generals: the commander of the east and the director of Teaching and Research, army generals Luiz Cesário da Silveira Filho and Paulo César Castro. The two are four-star generals, are at the top of the military hierarchy and are members of the Army High Command.

MediaOrganizations advocating the democratization of the media are calling for the holding of public hearings in the Federal Chamber of Deputies to debate the renewal of the concessions to TV network Rede Globo, which are under analysis at the House. The present TV Globo cases, a network whose concessions expired on October 5 last year, are emblematic, for it is the country’s largest TV network and is poised to renew its licenses in parliament.

The Brazilian Association of Nongovernmental Organizations (Abong), the World Association of Community Radios (Amarc), the CUT, the TV and Radio Workers Inter-State Federation (Fitert) and the Brazil Group for Social Communication (Intervozes) submitted a document to the chair of the House Science and Technology, Communication and Informatics Committee, Deputy Walter Pinheiro (PT-BA), calling the debate. Presently, the committee is reviewing four proposals for renewing Rede Globo’s concession in the cities of Belo Horizonte, Rio de Janeiro, São Paulo and Brasília.

The entities want the remaining renewals to be publicly discussed before being voted, as a way to broaden the debate on the theme. The processes should be analyzed also by the Constitution and Justice Committee (CCJ).

In the view of the National Forum for the Democratization of Communications (FNDC), a National Conference on Communications is a legitimate space to bring together the diverse proposals of the society with the bills drafted by National Congress and the Executive branch and to define new criteria for awarding and renewing licenses to radio stations and TV channels in Brazil.

Among the new criteria, the Forum proposes, for renewals, the filing of fiscal certificates attesting to compliance with social and labor obligations, a survey with the results of opinion polls or other mechanisms with an assessment of the services delivered to the community, confirming the meeting of the pledges made at the time of the signing of the concession, permit or authorization.

To the Forum, it is imperative to establish social quid pro quos, as for example a fund to finance public, educational, higher education and community broadcasting, the adoption by TV and radio companies of mechanisms to stimulate and allow public control over the programming – as for instance, boards with the participation of society, editorial boards and ombudsman services.

The Forum also demands that it be observed the impediment for individuals vested in public offices or enjoying parliamentary immunity or any special forum, and their relatives to the third degree, to hold a stake in, participate in the management of or be a member of the board of directors of sound and sound and image broadcasting companies. The Forum also calls for the observance of limits to the ownership of such concessions, the setting of mechanisms to identify the real concessionaires and permit holders, curtailing the practice of “electronic coronelismo (boss system)”.

In addition to the renewal of the concessions, another theme on the spotlight is the action by the Pro-National Conference on Communication Committee, which is engaged, together with several other advocacy groups, in collecting signatures in favor of a call, by the Federal Government, of the 1st National Conference on Communication. The petition aims to press the government to call the conference, given that more than 50 sectorial conferences have already been held.

This space is of great importance for society to discuss and deliberate on the public policies and the new regulatory framework for the communications sector in Brazil.

The Pro-National Conference on Communication Movement appeared officially in June of 2007, at the end of the National Communication Summit. Today it comprises some thirty nationwide civil society organizations, the Human Rights and Minorities Committee (CDMH) and the federal prosecution.

Read the official note by the Pro-National Communication Conference movement, released on March 19, 2008, by accessing link

Social movementsOn August 8 was held the 12th National Plenary of the Single Central of Workers (CUT).

On August 8, plenary participants moved to the city of São Bernardo do Campo to approve the struggle plan at a massive popular assembly of the working class that was held on the city’s main square.

The assembly was preceded by a big march that departed from the ABC Metalworkers’ Union and had the participation of thousands of working men and women who had come to attend the assembly, who were joined by those who were at the 12th Plenary.

The 12th plenary called the 10th CUT National Congress for the month of August of 2009. It called, too, a day of struggle and mobilizations, emphasizing the Working Class March due in December 2008.

The struggle plan includes the following points: challenge the national sustainable development project, which should be hinged on the concepts of wealth distribution and valuing of work; inflation combat from the perspective of the working class, demanding a socially just tax reform, a reduction of the interest rates and tax relief for the basic basket; intervention in the municipal elections to commit the candidacies to an electoral platform for the working class, formulated by the CUT; extinction of the social security factor; massive investments in urban infrastructure and implementation of city statutes; foster the struggle for the agrarian reform, for the strengthening of family farming, fight for a limit to rural properties and the updating of the productivity rate; uphold the clean energy matrix from renewable sources; for a new income-tax rate; for the adoption of a national floor for basic education; for the strengthening of the fights for the legalization and decriminalization of abortion and in favor of the struggle against violence against women; strengthen the fight against child labor and slave labor in the countryside and the city; run a campaign in favor of the Single System of Health (SUS); struggle for the strengthening of the State, with more public entrance examinations, a policy designed to value civil servants and the combat against the creation of private law public foundations; boost the struggle for trade union autonomy and freedom, launching a nationwide campaign for the ratification of ILO’s Convention 87, for the punishment of anti-union practices and the right to strike; further the struggle for the extinction of the union tax and implementation of a collectively-bargained contribution; strengthen the agenda of the TUCA –Trade Union Confederation of the Americas, for union freedom, decent work and against FTAs –free trade agreements– and against privatizations; launch a campaign in favor of a bill submitted by popular initiative for an official referendum on the annulment of Vale corporation’s auction; boost the CUT’s participation in the construction and organization of the World Social Forum, in Belém in January 2009; strengthen the struggles against the criminalization of social movements, engage in the Marcha dos Sem (March of the Less) in Rio Grande do Sul and in the Cry of the Excluded; strengthen the CMS – Coordination of Social Movements.

Moreover, the CUT reaffirmed its commitment to end the union tax. This happens even as, by initiative of the Lula government, trade union centers are being regularized, pursuant with criteria defined by Directive 194, which will make it possible for all to receive a budget estimated in several tens of millions of reals.

There is an agreement signed by all trade union centers and the Ministry of Labor defining that still in August the government will send a draft bill to National Congress to replace the mandatory contribution in force for a democratic one.

The 12th CUT Plenary also approved several motions; among them, one of unconditional support to the Landless Workers Movement (MST), which together with other social movements, is under attack by society’s conservative sectors. The media, part of the judicial branch, the police apparatus and some state governments spare no effort to criminalize the countryside’s social movements.

Just recently, in the state of Rio Grande do Sul, the Federal Attorney’s Office approved a report recommending the dissolution of the MST. The document goes as far as condemning the use, in the settlements schools, of books by Brazilians Florestan Fernandes, Paulo Freire and Chico Mendes.

Part of the report dealt with finding a way to charge eight workers based on the National Security Law of the defunct military dictatorship. The document states, moreover, that the MST has ties with the FARC (Revolutionary Armed Forces of Colombia). The federal Police themselves, in an investigation already concluded denied the charges saying that there was found no evidence linking that organization to the MST.

In Pará, a lawyer with the Pastoral Land Commission (CPT) was convicted by the Federal Justice of Marabá for having participated in protests at the INCRA (National Institute for Colonization and Agrarian Reform) for the agrarian reform. The same federal circuit found three other rural workers guilty and sentenced them to pay 5.2 million reals to mining giant VALE, for not having obeyed a ruling prohibiting demonstrations in the premises of Carajás Railway.

Social changes
Two distinct studies, released by the IPEA (Institute for Economic Applied Research, a body linked to the government) and by FGV (Getúlio Vargas Foundation, private organism), affirm there has been “a growth of the middle class”.

In absolute numbers: between 2002 and late 2008, three million Brazilians who live in the country’s six main metropolitan regions – São Paulo, Rio de Janeiro, Belo Horizonte, Porto Alegre, Salvador and Recife – will have left poverty. Poverty rate in those six capital cities –where a quarter of the Brazilian population lives and two-fifths of Brazil’s Gross Domestic Product (GDP) is produced– will drop from 32.9% to 24.1%. The forecast for 2008 is that 11.3 million people will be on the poverty line.

The same survey by IPEA also showed a growth in the number of “the newly rich”. That group grew by 28.1 thousand people between 2002 and 2008. In 2002, people considered rich in the six metropolitan regions corresponded to 448.5 thousand. Now, in 2008, they will add up to 476.6 thousand. Nonetheless, the number of rich people in the total population in the six metropolitan regions has remained stable, at 1 percent.

The survey also showed a reduction in the number of indigent people in the six metropolitan regions. In 2002, 5.6 million people were considered indigent and in 2008, this contingent will have fallen to 3.1 million. The picture observed in those capital cities can be extended to the rest of the country.

An indigent in the survey is anyone living with up to a quarter of a minimum wage (presently R$ 415 or about USD 260) per month. The IPEA classifies as poor those people whose income per head is equal or lower than half a minimum wage (R$ 207.50). Rich are those people belonging to households whose income is equal to or higher than 40 minimum wages (R$ 16,600).

The survey reveals, however, that productivity gains are not being passed on to wages. That is so because, according to the institute, the richest would be “capturing” the growth in productivity, without transferring it to the workers with the lowest wages. To illustrate that, the survey uses data from the Brazilian industry, according to which productivity gains reached 22.6% between 2001 and 2008. Over the same period, the payroll per worker grew by 10.5%.

Data for 2008 was estimated by the IPEA, given that the year has not ended. Basically, the survey calculates the work- and retirement-derived income (that is, the wealth originated by financial speculation, for example, is not included in the survey).

There are controversies over the phenomenon, especially if, besides poverty, we would also be reducing inequality, that is, “the distance from the top to the base of the pyramid”. There are also doubts regarding the structural character and the “sustainability” of the reduction of poverty, which is based on the growth of the economy, on the increase of the minimum wage, on the government’s cash transfer social programs, such as the Family Grant, and on the incentives to family farming. Would such changes resist to a change in the economic setting or to a change of government?

Another study, published by economist Marcelo Neri of FGV’s Social Policies Center, confirms that the gains in earnings experienced by the poorest population have shown greater resilience than in other times. And that the proportion of indigent in the six largest metropolitan regions of the country fell from 35% to 25%, from January to April 2008.

“For every one hundred workers of the six biggest metropolitan regions who were in a situation of poverty in January of 2008, 32 increased their income and changed social classes after four months. This greater mobility has helped reduce inequality and reinvigorated the middle class”.

As a result, the proportion of indigent people in the largest metropolitan regions fell from 35% to 25% from January to April 2008. During this period, the middle class, which before accounted for 44% of the population, hit 52%.

The study by FGV defined as middle class the population whose total household income ranged from R$ 1,064 and R$ 4,591. And the population whose household income was lower than R$ 768 was defined as below the poverty line.

Neri explains that there has always been great social mobility in Brazil, especially in the case of the poor who managed to rise to the middle class, but that they soon afterwards returned to poverty. This time he says the findings are more encouraging.

Analyzing mobility across social classes in the metropolitan regions surveyed, Neri’s study shows that, in 2003, 79% of the workers managed to remain in the middle class over a four-month period. In 2008, this percentage rose to 85%.

In the case of class E, the percentage of those who succeeded in rising went from 27% to 32%, with 16% moving to class D, 15% to the middle class (C) and 1% reached the elite (classes A or B).

The greatest mobility, however, occurs in class D, the class situated between the poor (E) and the middle class (C).

In 2003, the movement of those workers was slightly more declining (24% fell to class E) than rising (23% moved up to class C). In 2008, the percentage of those who rose was 30%, exactly twice as much as those who fell – 15%.

To the economist, the data is positive and reflects an improvement in wealth distribution. “The drop in inequality that we are seeing now is spectacular, of an intensity comparable to that of the income concentration growth of the 1960s. Brazil discovered in this movement a kind of oil well that, well exploited, is helping to take out millions of families from poverty.”

Another controversy regarding the data refers to the term “middle class”. To Marcelo Néri, the size of this class or the way it is defined is of lesser importance in his study.

“The limit that defines the ranges of each class, I agree, is arbitrary, it is a simplification. What we showed that is most important is that it is growing and that, even with the international crises, this trend continued in 2008.”

Neri states that. in his survey, he opted for classifying as middle class the households with total income ranging from R$ 1,064 and R$ 4,591 because it is this income bracket that distinguishes those who are not among the population’s richest ten percent and the poorest fifty percent. Based on this cross-section, tracking the evolution, according to him, was the most important point.

“What I wanted to call attention to is that this class grew. Even if you consider as middle only those who are in classes A or B [household income in excess of R$ 4,591], there also was a rise”, he says.

Neri says there are other ways of defining what the middle class should be and that one of them is currently being developed by the FGV and will soon be announced, one that takes into account not the people’s income but their expectations with regard to the future.

The problem, however, is not limited to what one considers “in” or “out” of the middle class, but should be extended to what one understands by “social class”. The chair of the Brazilian Association of Polling Companies, Waldyr Pilli, helps illustrate the difference.

Pilli agrees with Neri in affirming that the middle class is growing in Brazil, regardless of the way it is defined.

In January this year, the association updated its criterion for defining economic classes, known as Criterion Brazil, the most employed in opinion polls and market surveys.

The criterion, in order to facilitate the surveyors’ fieldwork, creates a scoring table with regard to the quantity of goods in each household and the schooling of the head of the household. Based on that information, classes are divided in eight groups: A1, A2, B1, B2, C1, C2, D and E.

“What we want with this criterion is to have a tool to estimate the people’s purchasing power. We utilize the table according to the possession of goods because not everybody is able to inform the household’s total income, but almost all can tell how many radios, cars or TV sets they have at home”, Pilli says.

He explains that there is no immutable rule to define the division of the economic classes according to the Brazil criterion.

“What we try to do is to keep the proportion of the population that is in each class more or less on the same levels. That’s why we update the criterion frequently. It’s an arbitrary way to classify, but we must understand that the objective is exactly to differentiate people according to their consumption power, and not classify anyone in terms of social classes”, states the association’s chair.

Following this track, we can say that when defining a social class based on the consumption capacity, we are adopting a bias for interpreting reality that contains a series of political and ideological outcomes.

The publication of the studies cited produced heated debates. Curiously, intellectuals close to the PSDB adopted a very critical tone. According to José de Souza Martins (O Estado de S. Paulo newspaper, August 10, 2008), for instance, “if the news that a rise in the number of Brazilians who can be defined as middle class brings some ideological comfort, the everyday reality still does not bring us any visual comfort”.

“In the eyes of all of us continue to burn the tenements and slums, the street children, evidence of a numerous humanity without future. Both the IPEA and the FGV data, released these days, on the expansion of the middle class, put us before the persistence of indications that an immensely greater number of beneficiaries of social ascension remain in the waiting line of the very metropolitan regions, which are the reference for this data. Not including those occult and the invisible, refugees in the rest of Brazil, the statistically poorly loved”.

As can be seen, an interesting polemic which, however, goes beyond the purposes of this Periscope. Nonetheless, two things are worth stressing: the up-to-date nature of the debate on social classes and the chagrin of the toucan intellectuality and the leftist opposition in face of the undeniable fact that the overly criticized economic policy of the Lula government, regardless of the name it is given, generated an improvement in the consuming capacity of an important share of the Brazilian poor..

Economic policyThe government in general, its economic area in particular, is still the stage for a dispute between various distinct orientations. At the Central Bank, whose importance is known by all, a conservative, anti-developmentalist and pro-financial speculation position is still hegemonic. Proofs thereof are the successive meetings of the Copom to decide for raising the base rate.

The news this time is that many developmentalists publicly admitted not only the need to reduce public spending but also that the Central Bank was right in raising interest rates.

The caution of these developmentalists stems from distinct reasons. Some are guided by the expectation that the incumbent Central Bank chair will leave soon; therefore, it would be better not to make too much noise, so that his substitution does not bring about side effects that oblige the future chair to raise interest rates. To this probable motive we should add a rising concern with the international situation and, thereof, with the situation of the Brazilian economy.

Let us see the position of two critical economists, one from the opposition (César Benjamin; FSP, July 26, 2008) and the other from the ruling coalition (Amir Khair; Monitor Mercantil, July 26-28, 2008).

Benjamin says that “the government has reacted in a lax way to the changing picture of the foreign accounts. The problem is dealt with in a diffuse, non-systematic way, with no one feeling clearly responsible for it. The results of current transactions have been negative since October 2007, and the worst expectations have been systematically outperformed. The Brazilian trade balance started to lose dynamism in 2006, when exports nearly stagnated (in quantum), while imports continued to grow. From then on, the situation has worsened quickly. The IPEA has just revised down its forecasts and started to work with a balance situated at the interval between US$ 21.6 billion and US$ 25.1 billion, even as the prices of our main export goods continue exceptionally high. If the best of these hypotheses materializes, we will have a reduction of almost 40% in the trade balance in just one year. (…) The famous 200-billion-dollar reserves have feet of clay, for they are the direct outcome of a foreign liability that is their multiple and does not stop growing. Once again, we depend on short-term capitals to finance a rising foreign deficit. They are the main beneficiaries of the high interest rates and the cheap dollar”.

Amir Khair considers that the Central Bank has been practicing an anti-developmentalist policy for more than a decade. Khair stresses that, in addition to reducing interest rate-driven expenses, the path to sustainable and inclusive development entails a radical alteration of the tax system, which is highly regressive in Brazil.