Two amazing goals won Brazil the World Cup. Now it is up to Brazil’s politicians to win support by overcoming the country’s economic and social woes. Leading American and Western analysts are now acting as if Mr. L. E. Lola da Silva — known as Lola — has already won the election by defeating his opponent, Mr. Jose Sierra. These are mere speculations but may at the same time indicate the severity of economic and social conditions facing millions of Brazilians. Mr. Lola, a child of the leftist labor movement that in the 1970’s fought appalling economic conditions which resulted in the military taking power for 20, years is no longer the man he used to be. He has become a pragmatic personality with much power and influence. His party has already won provincial and municipal elections and is known for its integrity and wise administration. People might not have to worry about the personality of the party leader as much as about the threat posed by party ideologues who still wield considerable influence. If it came to power, the moderate minority would pursue the same economic objectives as the incumbent government but it must first succeed in containing the minority extremists. One advantage is not being associated with the favoritism and cronyism for which the government is blamed.
Only four years ago Brazil’s political and financial troubles were even worse but since then the authorities have managed to contain the situation. The national currency is no longer pegged to the dollar; a surplus has been achieved and, most importantly, the liberalized economy has won the trust of multinational companies. The question is whether the current crisis is the outcome of domestic policies or the product of a greater international crisis and to what extent Brazil is capable of overcoming it.
Media misinformation and misleading campaigns should not deter people from dealing with reality. Such campaigns may reflect negatively on the economy as evidenced by a drop in foreign investments, increased capital flight and the lower value of government bonds. On the other hand, when the government, the result is that cash reserves amounted to more than $10 billion, interest rates remained high and inflation dropped. The drop in exports is attributed to Latin America’s deteriorating economic conditions and the recession in the United States.
The economic problems facing Brazil are typical of those experienced by other developing economies. There are signs of growth and the drop in exports is blamed on world recession and not on scarcity of material. The stumbling block for Brazil is its inability to access world markets while relying heavily on US and South American markets.
But these fears and doubts should not be viewed as serious threats which impede the ability of the Brazilian people to move forward. What is needed is for a team spirit to achieve an economic miracle to add to the football miracle.
The way out for the Brazilian economy lies in restructuring financial institutions, producing an efficient administration, greater productivity and less public debt but this should not come through increased taxation.
The country is blessed with rich natural resources; it has an excellent infrastructure, especially transport, and enjoys cheap labor. The challenge facing the government calls for regaining investors’trust. This in turn requires commitments to implement programs whose ultimate objective should be increased productivity, more exports, curtailed inflation and more investments. Brazilian industrialists and exporters need to revolutionize their thinking.
Twenty-five years ago the country’s poor refused to eat chicken. Today Brazil is a leading chicken and meat exporter competing with American producers. The Brazilians need to apply their football tactics to their economic problems.
