March 30, 2008: "Bush, my son, solve your crisis."
September 17, 2008: "What crisis? Ask Bush."
September 22, 2008: "Until now, thank God, the crisis has not crossed the Atlantic."
September 29, 2008: "For Brazil, if it comes close, it will be very minimal."
One day later:
September 30, 2008: "The crisis is very serious and so intense that we do not yet know the magnitude of it."
October 4, 2008: "There [in the USA], the crisis is a tsunami. Here, if it reaches us, it will be a marolinha (high wave), not even good enough for surfing."
November 8, 2008 opening the G20 meeting in São Paulo: ”Nobody is safe and all countries will be affected by the crisis.”
During the São Paulo G20-summit (one week before the summit of heads of state in New York), ministers of finance and presidents of the central banks, discussed measures against the financial crisis that began in the United States. The group intended to rally forces to get more influence over the direction of the global economy. In his openings speech, President Luiz Inácio Lula da Silva said that the crisis is serious, requires coordinated actions, and that no country in the world will be spared.
Lula also said that the G7 countries - the United States, France, Italy, Germany, UK, Canada and Japan - no longer are in a position to lead the direction of the world economy solely. He called for more participation by emerging countries arguing that in 2007 these countries accounted for 75% of the growth of the world economy.
’The crisis is global and requires global solutions also. It is time for a pact between governments for the creation of a new global financial architecture.” he said.
For the world press assembled in São Paulo the G20-summit was a nightmare. Due to a failure of the press service, journalists from around the world could not hear Lula’s speech.
While the president gave his speech at the Hilton Hotel, the journalists were confined in a room of the Hyat Hotel, at a short distance of the Hilton, where the meeting took place. All should be watching the speech by Lula via a tv-screen, but the screen did not work.
According to the Ministry of Finance, the transmission system of the NBR failed and the journalists were unable to follow Lula’s speech.
”It is a shame, it is a shame,” shouted the foreign journalists accompanying the meeting of the G20.
Nevertheless the summit was the perfect moment for all who, often only preaching to empty pews, resisted the "neo-liberal" free market economic model highflying in the past few decades. Politicians, economists and social activists want to take advantage of the current financial crisis to bury this model once and for all, together with all forms of speculation.
Since the beginning of the crisis, President Lula gradually changed the tone regarding the crisis in the global financial system and its consequences in Brazil. Apparently the crisis came unexpected, with a huge foreign capital outflow that took both the government and the private sector by surprise. It generated mistrust between banks which stopped lending money.
In a clear change of behaviour, the government and its economic team finally began to realise the seriousness of the problem, that Brazilian companies had with derivatives - bets on the recovery (over-valorisation) of the real - and the over-optimism of President Lula, who came to say that the crisis of Bush would not reach the country.
Some internal contradictions within governments, especially between Central Banks and Economy Ministries, are becoming more acute. In Brazil, the dominance of the monetary authority (the Central Bank) suffered a blow when emergency measures were needed to avoid a greater economic slowdown.
The president of the Central Bank, Henrique Meirelles, tried to soft-pedal this approach, underlining instead the concerns over inflation that were also expressed in the meeting’s final communiqué, and the special characteristics of each country.
Programa de Aceleração de Crescimento (PAC = Program for Accelerated Growth). The president said that the global financial crisis not caught Brazil unprepared and promised that the government will not allow that the country's economic growth will be hampered. "My government and the people have made sacrifices and are now beginning to reap the rewards ... with our expanded home market, which protects us partly of the international crisis," said Lula. "The government will not allow our growth compromised," added the president.
Former President Fernando Henrique Cardoso criticized the way Lula’s government was facing the economic crisis and was ironic, calling Lula a "great economist", in reference to the statements Lula made by calling the crisis a marolinha when coming to Brazil.
“No need to be aggressive with anyone personally, but we have to say that not everything the master is saying, is right, because it is not. We have to say the king is naked here, there, and yonder. Put your clothes on, Mr. President. Do not talk nonsense, Mr. President. Be more consistent with your history. Don’t be as fast in your judgments as the others. Note that a nation is made in the course of generations. Don’t be so pretentious. Be a little more humble,” completed Fernando Henrique Cardoso.
The former president said that people realize when things are not going well.
”I understand that the president have to animate the country. But the country is not silly. The country understands when things change. Things have changed in the world, changed for the worse. It is cyclical? It is momentary? Yeah, but we have to be able to view the future to leave the ruinous situation we are in and don’t continue saying that it is not ruinous. It is ruinous."
But after all nothing really changes. All governments in the world are implementing stimulus programs, not so in Brazil. Apparently the Lula’s statement that all-works-in-progress of the Programa de Aceleração de Crescimento (PAC = Program for Accelerated Growth) will continue is, in Lula’s opinion, sufficient enough alongside the high level interest rates and (disputable) interventions of the Central Bank in the exchange market, selling its stock of dollars to keep the real over-valorised, in favour of the banks, disgracing the products manufacturing segment.
President Lula planting an aroeira tree
sources: UltimoSegundo, O Globo, IPSNews, J. Bosco/O Liberal