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.
4 years ago