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Saturday, December 20, 2003

Realism without cynicism

Brad deLong quotes The New York Times on Lula being Brazil's president for one year now. "Panicked by Mr. da Silva's past as a fiery labor leader, traders sent Brazilian bonds and the currency tumbling last fall. Banks shut off credit lines to companies, leaving the country all but dependent on support from the International Monetary Fund. When Mr. da Silva took office Jan. 1, he surprised many by choosing a market-friendly economic team that promptly reined in galloping inflation by raising interest rates and cutting more than $4 billion from the government budget. "Many believed, and with reason, that Brazil would not survive the crisis," Mr. da Silva told government ministers, lawmakers, generals and labor leaders gathered at Planalto, the presidential palace.

But now, Mr. da Silva said, listing his government's achievements -- falling interest rates, booming exports, a stable currency -- "the time of uncertainty has passed." He added: "We have reversed the worst expectations. We have won back confidence in our economy and in the capacity of this country to grow."

The encouraging aspect in my opinion is this: "He has always tried to explain to ordinary Brazilians in speeches and in public appearances why their economic sacrifices were needed. As he said Thursday: "The bitter decisions were taken consciously and with an eye on the future." In terms of his popularity, his up-front approach seems to have worked: a poll this week showed Mr. da Silva's approval rate buoyant at 66 percent, just three percentage points lower than three months ago."

Remarkable that neither in the NYT-article nor in Brad DeLongs review is there mention of Lula's role in the preparation and the meeting of Cancun. This will have contributed greatly to his popularity at home. And deservedly.

One person reacting at deLongs site wonders:"What is the significance of the answer to this question?" referring to deLongs closing sentence: Cardoso did a lot of heavy lifting. Now Lula da Silva is doing his share. But will it be rewarded by rapid economic growth?"I share this guy's (Bulent's) curiosity. Or to put it in other terms: WHO is going to reward Brazil with rapid economic growth?

The traders that sent Brazilian bonds and the currency tumbling last fall ? I'm afraid that is the implicit answer.

Reminds me of the terrible dilemma when faced with the arrest of mr Khodorkovsky (the multi-billionaire who dared Putin and was imprisoned for that reason). I don't have the slightest sympathy for the guy, -you simply cannot have grown from communist-youth-organizer to billionaire in Russia in a few years and be a decent guy-, but he should be supported still.

(we witnessed how Khodorkovsky and the likes of him figured in the recent Russian elections....
Sometimes it's hard to be "realistic but not cynical". Lula's example offers some hope on that. )

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