This Wednesday a
conference on projections for 2016 took place at SECOVI Real Estate Union in
São Paulo. The tone of the presentations did not differ from the reigning mood
in the Brazilian society these days in view of gloomy prospects in the short
term.
The makings of the
current crisis are at this point widely known. In a nutshell, having benefitted
from favorable circumstances in the world economy for a long time, the Lula and
Rousseff administrations nevertheless failed to promote growth sustainability
through the necessary investments in infrastructure, technology and
productivity.
Worse yet, in the past
few years interest rates, fuel and electricity prices were all kept arbitrarily
low. In the meantime government expenditure never ceased to increase,
contributing for the creation of a serious fiscal imbalance. That added to the aggravation of the
government-owned Petrobras oil company’s hardship, contaminated as it was by mismanagement
and corruption.
Almost a year into its
second term in office, the government has been consistently losing support in Congress.
Necessary laws to salvage its accounts from turmoil failed to obtain approval
from the parliament. According to today’s speaker former Central Bank president
Affonso Celso Pastore, although Brazil’s foreign trade balance has lately been
improving, “there will be no solution without budget cuts and reforms”.
It is clear to see that
such state of affairs can only deepen the crisis and delay the recovery from it.
Bad news for most local entrepreneurs and workers, but not necessarily so for
foreign investors since Brazil is temporarily on sale. Things are bound to
worsen before they get better again – which will happen sooner or later.
Yet as Executive and
Legislative clash, the Judiciary takes the lead. Investigations on the
corruption-linked scandals at government-owned Petrobras oil company keep
producing arrests and sentences against those responsible for some of the
largest contractors in the country as well as implicated party officials and –
lately – even previously unsuspected congressmen. Others may follow soon.
For another speaker, political
correspondent Eliane Castanhede, not all is lost though. “The half empty glass
is also half full”, she says. In the midst of this huge ethical and moral crisis,
“something is changing in this country, perhaps the construction of a new sense
of citizenship”. Now that is good news for everyone.
