60 Minutes - Brazil's Booming Economy

By Mely Lerman, December 16th, 2010

Two years after Morgan Stanley declared that the Brazilian econonmy will shrink it seems the reality is stronger than the American previsions (or should I say wishful thinking). Brazil has proven that all those preaching the Chicago school theories to save Latin America have been wrong. The Brazilian way was to invest on people. It was the purchasing power of the poor put the economy into gear. This is the big secret of Brazil's success.
17 years ago Fernando Henrique Cardoso (then Ministry of Finance) started the Plano Real. The moment he stopped the inflation it tripled the buying power of the poor people. They just didn't have the tools to cope with the incredible inflationary rate. The purchasing power increased and the effected the whole economy. It improved the job market, improving the econoomy further.
But then there was Lula.
Lula in his eight years accelarated this process with anti-poverty scheme that, in fact, turned to be financial injections to the whole country development. Zero Hunger, Bolsa Familia (that pays a monthly stipend per child attending school) and many development programs came aside with an increasing minimum wage.
60 minutes took a glance at the Brazilian economy. Superficial but interesting.

The Future Arrived Yesterday

By Mely Lerman, June 24, 2010


Yesterday I heard people speaking about Brazil as a World power.
For us Brazilians, Brazil was always “o país do futuro”. The nation of the future.
Yesterday it was already future.
I am following Brazil growing up since 1992 (the first time I went back after running for my life from the hands of the dictatorship). At the start of the 90s Brazil was a country with people dying in the streets. Since then I have been working in Brazil from time to time and could feel the changes through the years. The same places people were dying from extreme poverty twenty years ago you can see people with happy faces and well dressed (not Christian Dior but well dressed).
When you come from outside you can feel the changes already in the airport but the Brazilians (at least most of my friends and my cousins) are always telling me how Brazil is not going well.
I did not hear from any of them some historical and general perspective. They always stick to some detail to explain to me why Lula is not doing sufficient or why Lula is doing too much.
I would like them to be with me yesterday at the Tel Aviv University. It was a business meeting about opportunities in Brazil. Not a big event sponsored by embassies and governmental agencies. On the contrary, it was a very down-to-earth event with lawyers explaining about taxes in Brazil, business talks and a lot of graphs.

http://video.tau.ac.il/Lectures/Management/MIT/2010/23_06/

It started with people talking about the possibilities of joint ventures, taxes, how to invest, taxes again, Mercosur, and bit by bit it went into a crescendo. The last speakers were people who told about their experience working with Brazilians – a guy that went through the whole process of the establishment of GVT till the selling of the company for 4.8 billion dollars, a small startup very successful in bringing some kind of communications to areas such as the state of Acre and the third one was a guy from Babylon.
They were Israelis speaking about Brazil with more emotion and empathy than the Brazilians themselves. They talk business but they showed a lot of admiration for the work of the regulator, the way of Brazilians doing business, that you can trust the Brazilian partner and Brazilians at large. They talked about crime in the streets. They all talked about the taxes but explained that in time it is possible to understand how to live with it (you just need excellent accountants). All of them assured the forum that he never was in a position that he needed to pay bribery.

The last one, the guy from Babylon at a certain point explained to all: It is not like Switzerland or France. It is not like England. It is like the United States and China. It is a WORLD POWER!
That’s it, Folks. Finally, the future has arrived. Brazil is the country of the present.

I never fought with anybody

By Mely Lerman, March 17th, 2010


The day before yesterday I had the opportunity to be on the King David Hotel on a business seminar “Brazil-Israel: Free Trade and New Business Opportunities”.

The main show was, of course, President Lula and I’ll get to it in a second. I just want to refer to a fact that for me was very peculiar: the Israeli press did not cover the event. They wrote about it, and there were again one or two articles about “the Brazilian economic miracle” and they reported that Netanyahu said something about constructions in Jerusalem in his “welcome Lula” speech and that the Israeli foreign minister boycotted the visit.

The Israeli press, like the whole Israeli business community did not understand till today the importance of Brazil in the future of the World economy. For almost a year I tried to start a business bringing software companies from Israel to Brazil. Nobody was interested in investing on marketing themselves in Brazil. Their focus is, till today, the US. They don’t understand the paradigm has changed. Part of it is pure ignorance. Many Israeli businessmen just don’t read newspapers. But mostly it is cognitive dissonance: America has always been the Israeli dream and they are not ready yet to part from it and, on the other side, the image they have of Brazil is of crime, corruption, and carnival in the slums.

They are not ready yet to the future.

No doubt the visit and the agreement between Israel and Mercosur will change a little bit of it but, judging from the press coverage, it will take time.

Now, to the Presidente.

President Lula spoke from written pages but at a certain point he look at us and said: “I’ll leave the protocol!” and put the pages apart. And then Lula (not the president) spoke.

He looked at Peres and said: “I never fought with anybody” (in Potuguese it sounds better: “Nunca briguei com ninguém”)

“In all my life, I never fought with anybody” – he said again. I had disagreements, and many disputes. I have a very difficult party and we had our confrontations but I never fought with anybody.”

“Hugo Morales was elected in Bolivia. We helped him. “- I don’t know if this declaration is compliant with the non intervention diplomatic principle but that is what he said. “We helped him to get elected and what is the first thing he does?” – And then a pause. “He took the Petrobrás from us. We helped him and he took the Petrobrás. A lot of people in Brazil wanted us to go and fight with Bolívia. There were even talks about intervention. But I said no. I remembered my roots. No way will a Brazilian metalúrgico (ironmaster) fight against a Bolivian Indian. I said to my colleagues – it is their gas. I went there and made a pact with the Bolivians”.

“They got their gas and we made business with them”

He drinked a little water and continued: “And then a bishop was elected president in Paraguai. Same thing occurred. Again we went there and signed agreements. Today we are the best friends. Brazilians don’t want to be rich and all the countries around us to be poor. We want that everything will be fine for everybody.”

“When I was elected I went to visit President Bush. It was February 2002. The Iraq war did not start yet but in his mind he was already at war. He talked only about the war. I told him – Mr. President, I have only one war – the war against poverty in my country. I was elected in a platform against the American policy. None in South America can be elected unless he is anti-American. I came from the left. Everybody thought and expected that I will fight America. And you see” - and he looked at Peres and then to all of us –“Bush already finished his career and I am going to finish mine and we did not fight even once”.

“There is no need to fight”, he finished.

Peres looked at him and smiled indicating he understood the message. Did he really?