(Published at the Eurasia Review)
Formerly praised by international analysts as a paradise for investors that would like to flee the European crisis, Brazil seems to be having some troubles in sustaining its market beauty as mainstream media portals such as the Financial Times and The Economist have been dedicating big headlines to expose the presidential struggle in order to secure positive economic indexes.
Among the most alarming numbers, it is possible to highlight the negative result of a subtraction involving the inflation rate of 2012 and the respective economic growth – what means that, by the end of the year, the country’s development was not only below the government expectation but also negative, if relative data is taken into consideration.
Besides the risk of getting back to the years when economic instability haunted the country, the main concern that must be arisen accrue from the political scenario as Dilma Rousseff has just announced her intention to run for re-election right after Aécio Neves and Eduardo Campos, both popular and charismatic leaders, confirmed their intention of being the future Brazilian president.
Understanding it better, while Aécio Neves is the opposition leader, grandson of the first post-dictatorship civilian president and former Governor of Minas Gerais (Southeast region) with approval rates above 80%, the socialist Eduardo Campos dwells Dilma’s political ground, also being the grandson of a well-known politician and enjoying high approval ratings as the Governor of Pernambuco (Northeast region).
Wasn’t it hard enough, Mrs. Rousseff – even relishing great popularity rates – has been facing not only bad economic results but also several corruption crises inherited from Luiz Inácio da Silva, former president and her political sponsor.
As the elections are not far away, it means that the next 19 months are going to be replete – from both sides – with government overspending, populist proposals and protectionism (as it is how politicians manage to stimulate donations from large entrepreneurs).
Actually, the first step was already given: a new law is being proposed in order to loosen the restriction knots that regulate public budgeting and spending, allowing executive branches to increase their debts, among other issues related to fiscal responsibility.
The second one, personally announced by the president on all the open TV channels, calls for a reduction in energy expenses in the range of 20%. The problem lies on the fact that it aims to increase consumption in the exact moment when hydroelectric reservoirs are not being enough to provide energy to the country.
In the end, if the future follows historical trends, the country economy will not only be far from being the apple of big investors’ eyes, but it may also get back to the times when its people used to strive to calculate how much a bag of rice or a package of meat would be costing on the next day.