Brazil – what now?

By Alyssa Lamp

With the crisis that has overcome Brazil, Florida’s largest trading partner, we requested an interview with the consultant, Carlo Barbieri, who has recently become somewhat of a celebrity, having been invited to give interviews on various television stations in South Florida.

BRT- How do you feel about the new situation that has garnered so much media coverage? 

CB- The truth is that this coverage will be short-lived.  With the Brazilian crisis, the television channels, specifically political newscasts, have sought to interview people who can offer a realistic and impartial analysis about what has been going on, and the outcome from the Brazilian perspectives.

I can’t honestly say that our analysis has been completely impartial, but it has been honest and realistic.

On the other hand, I’m certain that once this transition phase is over, the subject will disappear from the media.

I can’t imagine that I’ll continue to be asked to come on four or five television shows or radio broadcasts every other week.

BRT- But did you enjoy this exposure?

CB- Honestly, no.  I’m a political analyst as a result of our work as consultants for investors, that’s how I make a living.

On TV or on the radio, you have to share your opinion and answer questions on the spot. Your views are immediately broadcast, which is quite risky given that you’re not sure what is going to be asked.  It’s essential to be experienced and knowledgeable.

I did, however, feel obligated to do the interviews because there is a thirst for clear information about the country that is so important for Florida.  I also felt the need to clarify what’s really going on, and not what the government-backed, sensationalized media wants you to think about the crisis.

BRT- Did you foresee what was going to happen?

CB- Honestly, I don’t think anyone could have predicted what was going to happen.  As we said on some of the programs, in a country like present-day Brazil, even the past is uncertain. At the very least, what happened with the acting President of the Chamber of Deputies was proof of how uncertain the current situation is.

BRT- What lead a country like Brazil to such a sad situation?

CB- You’re totally correct when using the term “sad”.  This is the reality we’ve recently been experiencing.

President Lula was elected with the hope of a new government, waiving the flag of morality and social justice.

He took over a government that was fiscally sound with a balanced budget and a favorable environment for foreign trade.  He enjoyed fantastic international support for being a common laborer who rose to the presidency of a country such as Brazil.

He began his term with ample internal support, but without a Congressional base and a press corps with an unclear position towards him.

Being accustomed to negotiating throughout his life, he delegated to his colleague, Jose Dirceu, the task of forming a Parliamentary coalition and a relationship with the press.

Then came the so-called “mensalão”, a bribery scheme that paid a monthly stipend to each Member of Parliament who voted in favor of the government.

He literally paid off the most important members of the press, be it by way of capital contributions though official financial institutions, or through significant exposure.

Additionally, each time he needed to increase his power over radio and television stations, the “Prime Minister” would demand the ouster of certain journalists or political analysts who had an impartial or contrarian position against the government and then would hire people from the PT (Workers Party) or those who had a favorable view of the government.  With that, he came to enjoy major support from the media, and his opponents were either suddenly faced with difficult financial situations or were shut down, and opposing journalists found themselves unemployed.

He then appointed trustworthy allies to the judicial system, even to the highest court in the country.  Today, of the 11 Supreme Court Justices, 5 were appointed by Dilma and 3 by Lula.  In other words, the Workers Party appointed 8 of the 11 Supreme Court Justices.

With this, it was widely understood that his allies could steal and perform corrupt acts, because he would ensure their impunity.

That’s how things went during the second half of his first term, and the situation got even worse during his second term in office.

BRT- Did this corruption cause significant harm to the country?

CB- They succeeded at literally breaking Petrobras, the largest company in Brazil, and left a budget deficit of R$400 billion, the equivalent of US$100 billion.

Technically, this was the reason behind the impeachment of the president, as she authorized spending without Congressional approval, and made huge payments by the government through public banks in order to hide the real situation the government was facing on the eve of her reelection.

BRT- What’s Brazil like today?

CB- Brazil is still in a state of shock.  We have 11 million people unemployed, a rate of inflation reaching 10%, a decline in GDP of 3.8% over the last year with the potential of more negative growth for this year.  Industrial output has decreased roughly 9% per year over the past three years.

BRT- Does the vice-president, recently named interim president, have the ability to turn things around?

CB- We’re still not sure.  At least he started off on the right foot.  He wants to reduce the size of the government, cut unnecessary government jobs, change the minimum retirement age, increase private spending on infrastructure projects as well as other fundamental steps needed to take towards economic recovery, which will not be easy nor fast.

This represents the largest ideological shift in Brazil since 1964.  We’re no longer at risk of becoming another Venezuela.  Will we return to aspire to be part of the first world? That’s still to be determined.

BRT- Does the Workers Party have the ability to make good on its promise to “set Brazil ablaze”?

CB- It has the conditions to do so, with almost a thousand trained people, among them Brazilians, Haitians and other immigrants. But without the public money that currently sustains them, I don’t think they’ll have the same ability to mobilize.  If the taps of government funding are turned off, they won’t have the ability to carry out any significant actions.  Furthermore, there is no other country that can help them keep this fire ablaze.

The Bolivarians are currently faced with internal issues in their respective countries, and the Workers Party needs more help than what others can offer.

BRT- How has Florida been affected by the crisis in Brazil?

CB- On a positive note, the state has enjoyed an increase in investments from Brazilians, and an influx of immigrating executives, entrepreneurs and highly competent citizens. A negative affect has been a sharp decline in tourism and the spending that comes along with it.

BRT- Was this new wave of investments really significant?

CB- Enormous. We are the largest Brazilian consulting company in the United States, and I can honestly say that the number of investors has increased three-fold since Dilma’s reelection.

Carlo Barbieri is a consultant and journalist (by calling). Graduated in Law, Economics with courses in Business Administration, Management and Finance, in prestigious institutions in Brazil, such as, Mackenzie, USP and FGV and the United States at Harvard, MIT and Chicago.