Marcos Fava Neves
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Brazilian's Experience from 2003 to 2015: An Open Letter to German's SPD

Popularity 4Viewed 3306 times 2015-12-11 04:53 |System category:News

I was surprised reading Mrs Fahimi's (General Secretary of Social Democratic Party of Germany) comment in one of Brazilian's most important newspapers, regarding ex-president of Brazil, Mr. Lula da Silva, invited to speak in the SPD International Conference. Your comment states that this gentleman "was responsible for the insertion of Brazil in the world by creating a modern model of social-democracy and proved that it is possible to overcome neoliberalism". This is how it appeared in the press, and I hope we didn't have translation problems and it really was what you meant.

Let me react as a University Professor, telling that more information about Brazil is needed and I am available to send, most of them in English and published by internationally recognized journals and newspapers, like the Economist and Financial Times, among others. Just to summarize, the Government of Mr. Lula da Silva followed by current Government, that still has this gentleman as "hidden president", was one of the worst seen in Brazil. I will point out just 3 of several elements and evidencies.

a) Economy: we are harvesting now the results of a populist Government that didn't do any important reform to make Brazil more competitive in 13 years. Our economy doesn't grow for a long time as it could, and in 2015 GDP is declining by 3,5% with another 3% expected for 2016. The deficit of Federal Government is out of control, industrial production is declining unemployment exploding and unfortunately, inflation, a terrible disease that hits the poor, is back to our society at a rate of more than 10,5%. The Brazilian currency lost its value and interest rates are among the highest in the world, transferring money from people and from production, to the banking sector, another punishment for the poor people. 

So Lula da Silva's "modern model of social-democracy" as you call, brought these results. During this period Brazil lost its capacity to generate income, and now Brazil can't distribute income any more. Unfortunately until the end of 2016 most of the social gains that happened within the last 15-20 years will be lost. We downgraded not only in rating agencies, but as a society. 

b) Deterioration of Institutions and Corruption: Mr. Lula da SIlva's Government (2003-2015...) represented a strong deterioration of institutions and public companies in Brazil. I don't know if you are aware of what was done to Petrobras (Brazilian Oil Company) but a paper of the famous finances Professor Mr. Damodaran can be found on the internet and shows the destruction of value that happened. All of its Directors, indicated by Lula da Silva's Government, are in jail.  The Prime-Minister (Chief of Casa Civil) of Mr. Lula da Silva, Mr. Jose Dirceu, is in jail, condemned of several crimes. The President of PT (Labor's Party, his political party), Mr Jose Genoino was also arrested. The President of Congress during his Government (Mr. João Paulo Cunha, also from PT) was arrested.  Most of financial managers of PT (Delubio Soares and Joao Vaccari Neto) are in jail condemned of corruption. 

Following this disaster of having his Government team in jail, the CEO of the most important construction company of Brazil (and also of the world) that had several businesses (in Brazil and outside) having the President as a possible lobbyist is also in jail. One of the rising stars as Bankers during Mr Lula da SIlva's government also went to jail, joining one of the best friends of Mr. Lula, a cattle producer that did several businesses during his Government. So the private sector that interacted with this gentleman are now joining the politicians in jail.

Just to give one more example, the Senator leader of PT and Government in Senate, Mr. Delcídio do Amaral was just arrested planning a crime to remove from prison and disappear with one of the Directors of Petrobras during Lula's Government, to avoid him to speak what he knows about corruption. 

Any further information needed in these subjects, just use search engines on internet with their names and a lot of material will be found. Differently from Mr. Mujica (Uruguayan ex-president), there are strong evidences that Mr. Lula became a very rich man, you can find in the press and several books. To complete, justice in Brazil authorized financial investigation (opening accounts) of Lula's son, because of very strange consultancy businesses with companies that benefited from contracts with Brazilian Government. Strong evidencies shows that his family became very rich during his Government.

c) Confidence: Brazilians lost confidence in the country. We are losing a lot of young talents leaving because of all these issues, lack of growth, explosion of urban violence, lack of moral and lack of opportunities. As a professor, I deal with young people in Brazil, and it is depressing to see this movement. It is a sad society today, and the Germans that live here can be testimonies.

Unfortunately current Government (we can tell that it is the fourth term of Lula da Silva, the first two with him and the other two strongly guided by him) was elected in 2014 with only 42% of Brazilian voters (54 million in 130 million). It was not elected by the majority of Brazil, but by a very small majority of the ones that went to vote (opposition had 51 million votes). 

The disaster, as the Economist called in a recent article about Brazil, or his legacy finally reached the poor people and now only 7% of our population aproves this extension of Mr. Lula's Government. One of the lowest in history. 

All these facts formalized the beginning of an impeachment process, since there is strong evidence that government made illegal financial movements in 2014 and 2015. In parallel, another process is going on that can cancel the elections, if Justice can prove that money from corruption was used in PT's campaign and the evidences are strong. A recent poll shows that around 65/70% of Brazilian population wants impeachment. 

Although the Government is complaining and trying to say that this is illegal, impeachment is a democratic process, and the legal piece was written by three notable Jurists, being one the creator of PT (Labor's Party) in the eighties, very disappointed with all the corruption and bad management that we had in these 13 years.

Mrs. Fahimi and SPD, sorry to take your time in reading this article, but it is our role to make information more available to German society. What is written here is not my material, I am just summarizing issues that you can easily find in internet. 

Finally, I write all these words with sadness. I am a scientist not linked to political parties. I never voted him, but I supported his initial efforts and like millions, dreamed that he could do well and at the end, become the first Nobel Prize of Brazil, probably Peace Nobel. But his behavior and of his political party killed these dreams. 

In conclusion, based in all the arguments stated here, I strongly disagree with your original statement, and also want to criticize SPD for giving room and audience to a person that has a chance and it is not a small chance, to be in jail in 2016, since investigations are coming very close to him. 


Dr. Marcos Fava Neves
Full Professor - School of Economics and Business, University of São Paulo, Brazil.

(Opinions of the writer in this blog don't represent those of China Daily.)




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Reply Report Dr.Bill.Shen 2015-12-11 16:15
wow, this is quite contrary to what we know about lulism that played a central role in transforming brazil economy into an emerging power house in today's international economic arena. corruption is not unique to brazil at all, and is so rampant among emerging economies regardless of the political systems. as a matter of fact, we can simply use corruption level as a measure to differentiate between developed and devloping nations. as you know, some of the amount in chinese corruption cases would make some of those jailed PT members blush.
Reply Report MarcosF.Neves 2015-12-12 05:55
Dr. Shen, thank you for the comment. The worst was the destruction of the economy. Have a nice weekend.
Prof. Neves
Reply Report voice_cd 2015-12-21 09:54
Thanks for sharing your story here, we have highlighted it in our blog homepage.

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Professor of strategic planning and food chains at the School of Economics and Business, University of Sao Paulo, Brazil ( and international speaker. Author of 25 books published in 8 countries and in China, “The World on the Tongue”.


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