03/10/11 - 12h00

Brian Winter

Brian Winter is the chief correspondent for Brazil for Reuters. He was also a correspondent and foreign editor for USA Today and is the author or co-author of two books including The Accidental President of Brazil.

Background

• How Brazil stacks up against its BRIC peers?
• Brazil in 2020 : is this a “transformational’ decade?
• Outlook for the Brazilian Real and foreign direct investment
• The drivers and winners behind the commodities boom
• Is Brazil ready for the World Cup and the Olympics?

Interview

Tom

Today we’re going to do something different; we’re going to talk about Brazil from a journalist point of view. I’m happy to have with us Brian Winter. Brian Winter is the chief correspondent for Brazil for Reuters, which is the news agency. He’s based in São Paulo but he’s lived in Latin America for the better part of the last decade with stints in São Paulo, Mexico City and Buenos Aires. He was also a correspondent and foreign editor for USA Today and he is the author or co-author of two books, including The Accidental President of Brazil, a memoir by President Fernando Henrique Cardoso. I’d like to say thanks for being with us Brian, welcome to Talk 2 Brazil.

Brian

It’s a pleasure to be with you Tom, thank you for having me.

Tom

Before we get into talking about your book, I’d like to talk a little bit -- I saw recently you had a webinar about Brazil offering a whole bunch of information. A couple of points that you brought up is how Brazil stacks up against its BRIC peers. I’d like to start off by that, how does Brazil stack up?

Brian:

Well it has advantages and disadvantages, I mean let’s admit right up front that the “BRICs” is a largely a fictional creation right? I mean it was a bit of an accident of marketing that was put together by an economist at Goldman Sachs and then each of the countries involved to varying degrees saw reasons to embrace it. Brazil certainly thought it an opportunity to associate itself with China which has worked out very well for Brazil.

But as far as the differences go you know Brazil has a lot of advantages including, I think first on that list was robust democracy which of course in 2011 some people don’t necessarily see it as an advantage. Brazil can’t push through a lot of these big building projects in the same way that China can for example, but there are a lot of people who follow both countries and who say that, you know maybe China has some sort of crisis coming down the road because of the social tensions there because it has an authoritarian regime, so I would think that democracy is a advantage in that sense.

Then there’s also the matter of, and I don’t think this gets nearly enough attention, Brazil is in a peaceful neighborhood, and compared to its other BRIC peers, you know basically you can boil it down to Brazil is not next door to Afghanistan.

Tom

Right, that’s true.

Brian

And Brazil does not have a nuclear-armed Pakistan right across the border from it with missiles trained at it. The worst it has is Argentina and those countries tend to work things out on the soccer field instead of war.

Tom

I was going to say; the worst is soccer, right? And that’s about it.

Brian

That’s about as bad as it gets, yeah. Brazil is not growing as fast as the other BRICs now but it does have a lot of things going for it in the medium term.

Tom

Where do you look in part of your webinar? Where do you see Brazil being in 2020?

Brian

I think 2020 is a long ways off but I will say that for these next couple of years Brazil is going to continue to grow it seems, barring some sort of major meltdown in Europe or a double-dip recession in the United States in which case, you know, all bets are off not just for Brazil but for everybody. We might all want to get our shotguns and disappear into the woods for a couple of years.

I think that the most likely scenario for Brazil is just good growth on the order of three percent, three and a half percent which we wrote recently that the economy here has made a transition from great to good in the sense that in the last couple of years Brazil was growing five, six, even last year it grew seven and a half percent, which was great but not sustainable and you know it looks like it’s going to be down to that three percent level for these next couple of years which, you know what, for our audience that’s listening in the United States right now, three percent growth sounds pretty good, but it’s not quite what people were expecting here a couple of years ago.

Tom

But anyway part of that, let’s say the breaking mechanism placed on the growth is the fear of inflation and also wanting to show that there is, the fiscal policies are in line, and really part as a protection of what could happen in the rest of the world as you mentioned.

Brian

That’s right and you see manifestations of this everyday Tom, when you live in Brazil, as you well know. There are limitations that keep this place from growing any faster than it does. The most obvious one is the infrastructure which anybody who’s been lucky enough or unlucky enough to spend time, sometimes several hours in traffic in São Paulo or who’s arrived at the airport in São Paulo which is considered in a recent survey, was considered the worst in Latin America, which is saying something [laughs]. These are the things that eventually get in the way and because there’s scarcity of some labor and goods and because of these infrastructure restrictions it’s going to make it hard for the country to keep growing at that seven percent pace these next couple of years.

Tom

But there is, what I meant is there is room for growth, there’s a lot to do here if Brazil were better organized, if the infrastructure were there, but what I see bringing this all in together I think one of the other things besides infrastructure is what I consider a lack of education, a lack of a work-force that’s appropriately educated. [over-talking] I added just some of these advantages.

Brian

That’s absolutely right. I talk to CEO’s and others all of the time who say that they’d love to expand and make an even bigger bet on Brazil but they can’t in part because they just can’t find the people and I’ll give you two quick examples. One of them was the meat packing company Mafrig announced earlier this year that they had 3,500 jobs available from the factory floor all the way up to the executive level and the reason why they had so many positions open was just because they couldn’t find enough people to fill them; all up and down the spectrum in terms of school requirements and education levels and so on.

Then another similar example, I had an interview recently with the head of State security for the State of São Paulo, we were talking about crime and the various efforts to get more cops on the streets and bite into some of the safety issues that continue here. I said, "What’s your biggest challenge?" And he looks at me and he says, “Human resources.” Because they just can’t get enough people and so that’s really how this education issue that you mentioned, that’s how that plays out on a day-to-day basis.

Tom

That’s part of, you know even when you look at the infrastructure seeing the long lines at the airport and why things don’t work the way they should or could, much of the process is run by persons who need better training and sometimes they just can’t be trained well.

Brian

That’s right and in fairness, and I’m sure you recognize this, Brazil has come a long way in education as well, I mean the advances that have been made even since the mid 90’s are, as you see elsewhere in the country there’s been a lot of progress; enrollment in both primary and secondary education looks much better than it did 15 years ago, but it’s going to take some time for that play out.

Tom

Yeah, there’s still a long way to go in terms of that, so that’s what I see. So with all of that, and you mentioned part of that so I’ll look for foreign investment, you see it coming but one of those road blocks is that––a possible fear of lack of persons to fill the jobs that could be created here.

Brian

That’s right, I mean and to take one more specific example of this, let’s look at this big high profile story that’s played out here over the last couple months when President Dilma Rousseff was in China back in, it was either February or March. The big news from her trip was a deal with the Taiwanese company Foxconn to produce iPads in Brazil.

Tom

Right.

Brian

And when this happened a lot of kind of looked at each other here in the news room and thought, well that sounds like an interesting idea but how are they going to do that, right? I mean they have problems producing just really basic manufactured goods here, not only because of the education levels but because the exchange rate here is so strong and it makes everything here expensive and transportation system is terrible which makes transport of these goods tough and sure enough I published a story last week saying that this whole plan is in doubt now for a number of reasons and high up on the list again is this issue of just being able to find enough engineers who can put this thing together.

Tom

Right, and it’s not only people. Now you’re becoming more specific and that’s it; that there aren’t enough engineers even to build the buildings that are on the table right now, so.

Brian

And just one final point on this Tom, I would imagine that some of your listeners are sitting there in the United States with unemployment at nine percent and thinking hmm, [laughs] maybe Brazil doesn’t sound like such a bad place to be and the truth is that in recent years or actually historically it’s been tough for people to come here from abroad even people with higher skill levels, it’s a bureaucratic place as you well know, and it is especially difficult to navigate all the bureaucracy for people who want to come live here from abroad. I had a interview recently with the trade minister who said that they’re working with the labor ministry and the foreign ministry and they’re in pretty advanced stages of setting up an administrative reform that would make it easier for people with skilled labor to move to Brazil if they want to come help produce iPads.

Tom

Well not only iPads, I have seen some of this happening actually if you look towards the area in Rio de Janeiro where you have the petroleum or you’re talking about the off-shore exploration, what have you, there are today a number foreign nationals who are here already and coming and the government is trying to find ways to ease up on the bureaucracy because they need the workers, you know, the oil’s there, they found it, now to get it out and get it going you need people.

The same thing in the northeast with the shipbuilding and all the new investments there, you need people so there are things being opened up but the bureaucracy – I think the first thing for anybody coming that’s the first test; if you can get through the bureaucracy you understand three-quarters of Brazil.

Brian

That’s right, I mean it was funny I was listening to you speak there and thinking a bit like an American and my first thought was, well you know what with the oil – and we’re talking about these massive new off-shore oil fields; I actually saw a new estimate today saying that there could be four trillion dollars worth of oil out there at current market prices – and you tend to think as an American, you think, well, okay, the money’s there, clearly they’re going to figure out a way to make this happen, right, to get the people in the country in order to get this oil out of the ground because the incentive is there. But, it’s still not clear that Brazil has learned to get out of its own way in some cases, right? I mean it’s still not quite clear. There are a lot of really smart people up in Brasilia and the, you know, President Rousseff seems like a person who really understands business and who is committed in particular to getting that oil out of the ground, but you know this reform to get more foreign oil workers in in particular could have been done years ago.

Tom

Sure, I agree. A lot of things could have been done years ago and still happen but I have to agree with you that Brazil hasn’t learned how to get out of its own way and I’ve been here for 41 years and much of that I align to things I’ve said in other interviews here; Brazil doesn’t sell itself well because my personal opinion is that most Brazilians think that everybody just wants to come here and so it’s a done deal. I do think Brazil doesn’t sell itself well even in that sense of helping create the conduits necessary to have people come in, the exchange of expertise and back to the educational level of learning to do things in a different way.

Brian

They’re getting better though and I’ve seen – my experience is not comparable to yours, I’ve been coming here on and off for I guess eight or nine years now and I have certainly seen dramatic change on that front, not only with the perception that Brazilians have of what they need to do but also with the world’s perception of Brazil, I mean people started learning even before the global crisis erupted in 2008, people realized that Brazil was up and coming and now with the crisis and the fact that Brazil through it all has continued to do quite well, I think people are realizing that Brazil is not perfect but it’s one of the only games in town at the moment if you want to be exposed to a market with a lot of growth.

Tom

Right, but also from your experience throughout Latin America I think, would you say it’s fair to say that Brazil is the best game in Latin America?

Brian

Well it depends on what sector you’re in right? I mean…

Tom

Let’s go for generally speaking.

Brian

Generally speaking? No, I don’t think so, I mean if you look at the numbers right now, if you’re just talking about pure growth, Latin America, according to the IMF could come in last place next year among the major Latin America economies, I mean there are places like Peru and Columbia and Chile and even Mexico that are supposed to grow more next year. In terms of numbers, in terms of the size of the market nobody beats Brazil right now. If you’re combining numbers and growth, I say numbers – population, then no; nobody beats Brazil.

Tom

Yeah, population and the potential for the growth and turning these things around that’s where I would say, you know from the standpoint of an executive saying where is he going to put up his factory even with the restrictions and with the difficulties with infrastructure, from a logistical stand point Brazil still seems to be logistically the place to be.

Brian

Yeah, I mean if you’re going to set up in one place in South America it ain’t going to be Bolivia, you know what I mean? [Laughs]

Tom

That’s true. Now with all that said, is Brazil ready for the World Cup?

Brian

No. No. Not by any stretch of the imagination. The real operative question now is, is it going to be ready for the World Cup?

Tom

Yeah, maybe the question’s even that, will there be a World Cup here?

Brian

Well, I think there will be. I heard someone joke recently that if they were to, for some unforeseen reason, if they were to decide to move the Cup somewhere else because Brazil just couldn’t handle it they would probably just close this place down [laughs]. Somebody said to me joking it would be worse than the Maracanaso, the game that Brazil lost at home in the 19-- which year was that? I should know that, but I think it was back in the 50’s when they lost the World Cup in Rio to Uruguay. No I think that they will pull it off, but, but…

Tom

But?

Brian

But I think it seems at this point that if you were of the betting kind and you wanted to put some money on there being some sort of logistical snafu during the Cup; that would probably be a pretty safe investment. I mean there are so many problems at this point with, you know, doubts about ranging from the very basic core items like the stadiums being the most prominent example, I mean they’re going to have to work day and night with multiple shifts, I’m exaggerating a bit, but they’re going to have to work very hard in order to get the São Paulo stadium open in time for 2014.

And then there are the more, if you like, secondary elements such as the airports being the most prominent example where it’s just not at all clear that they’re going to be able to make any sort of substantial improvement there.

Tom

Well, what I’ve seen, and this is to our expectations specifically in the Campinas region, is the government announced that it will privatize or we’ll use the word privatization for the fact of the Viracopos Airport, the São Paulo International Airport, and I guess Brasilia as the starting mechanism to, not only attract the investment needed but probably the know-how necessary to update the airports. Because our expectation here in Campinas for the new airport, we’ve been talking about this airport for like 25 years [laughs]. It is, it’s the most talked about subject for us here at the American Chamber and other associations I take part and it’s, you know, when will it start?

But the feeling is and what it has been said that in the month of December the tender, the bid will go out and this will be offered for the privatizations, so we’re all looking forward to that. If that does happen, then I agree with you, they’ll be working day and night, multiple shifts, but that’s not even for the World Cup, we need those airports today for business.

Brian

Well that’s right, and the fact that the President has resorted to private capital in order to expand these terminals, or in the case of the São Paulo airport create a new terminal, speaks well to her pragmatism in these situations and her realization of the severity of the problem. This is not an easy thing for a member of her party to do, I mean this was a bid [inaudible] to draw a somewhat clumsy U.S. analogy, this is a little bit like a republican president increasing taxes, was essentially what she did, right? Because her party, the worker’s party has a very strong base in labor unions and certainly spent the eight-year Presidency of Fernando Henrique Cardoso complaining loudly about every single thing that even smelled of privatization. So for them to come around and do this was an important step and certainly encouraged a lot of business people here in São Paulo.

And then just one final thought on that, it would be tough for any country to keep up with the kind of growth that Brazil is showing right now in its airline industry. We’re talking about growth rates on the order of, I think the growth rate was some 22 percent last year, that’s an approximate figure but it’s somewhere in that neighborhood, and it’s supposed to be, if I’m not mistaken another 13, 15 percent in 2011. That is a lot of extra people. That is a lot of extra people, and so you know, I mean there are things that need to be done here and you can certainly say that Brazil has struggled and has not moved as quickly as it should in some areas but these are ultimately, again as anyone listening in the U.S. right now with a bit of envy hearing about all this growth, ultimately these are good problems to have.

Tom

No, they are, and like back when you said Brazil getting out of its own way in talking about the airline industry and the growth; two years ago I interviewed David Neeleman from Azul and at that time he was still in his visionary process of why he was starting his company here in Brazil and specifically why he was doing that in Campinas and he spoke so naturally and really based, you know, fact-based decision making and really today when we look at that in here 2011 everything that he said he was going to do and that could happen, did. So there were really no surprises; so you want a surprise? No. He looked at it, obviously all of his competency that he has in developing other airlines in the States and in Canada, it has happened pretty much the way he said it would.

Brian

Yeah, he is a remarkable guy.

Tom

And he is remarkable, and he’s remarkable in many ways .– but he’ also remarkable from let’s say the visionary aspect and the way he looked at it; he said it’s going to happen and I was in part of some of these meetings when he was talking to government officials and the feeling was that, the Brazilians didn’t believe him.

Brian

Well and this is, and just bringing it full circle here on the subject of the sporting events and the World Cup in 2014 and the Olympics in 2016. The whole original idea when Brazil won the right to host these sporting events a couple of years ago was, hey, let’s use this as an excuse to improve our infrastructure, not just with soccer stadiums but everywhere; with airports, with public transportation, and several areas and it looks like at least with the World Cup at a national level in the12 host cities, it looks like those original ambitions are just going to fall way short.

Rio is a different case, Rio is clearly, these two events are clearly having a galvanizing effect on that city and really changing the way it looks. But it’s not going to change São Paulo much, I mean the Olympics aren’t here but the World Cup is not going to change São Paulo much, it’s not going to change Belo Horizonte which is a big city of some seven million people in the middle of the country, I mean the original ambition there was very concrete, they wanted a Metro Line in time for the Cup; It’s not going to happen.

Tom

Yeah, and they need the Metro Line whether they have the Cup or not so…

Brian

I don’t know it will eventually happen but these things tend to get postponed unless you have a deadline which is what the World Cup seemed to provide. But you know they’ll set up some busses and they’ll declare a holiday on the days of the games in each city and they’ll figure out a way to kind of avoid chaos that way, but again if you look back at what was said when this all came through, it was not the original idea.

Tom

Right, but this is Brazil.

Brian

This is Brazil, that’s right [laughs].

Tom

I’d like to get back into – going into a re-play with you now and talk a little bit about the book which you co-authored, right? The Accidental President of Brazil, Fernando Henrique Cardoso and you mentioned now Dilma Rousseff and we have there in the middle President Lula which is, we’re comparing Fernando Henrique Cardoso and Lula, probably water and wine in certain aspects but just for our listeners, how did that come about? How did you help him write that book? How did something like this start?

Brian

Well, through failure basically like a lot of good things. I had been in Argentina for four years as a very young journalist and that was when the economy collapsed there and I decided as many twenty-somethings do when they’re exposed to dramatic events like that, I decided that it was the most important thing that had ever happened to anybody ever and that I needed to write a book about it. Nobody wanted to buy it, but luckily one of the publishers who saw the proposal for that book had agreed with President Cardoso to – they decided they wanted to do a memoir in English and they needed somebody who was young and impressionable and cheap like I certainly was at the time to help them out, and so I did, and it was great. When I walked through the door of his office in São Paulo for the first time and met him I was 26 years old and he was 73 and despite the near 50-year age difference, we got along really well and we were able to produce a pretty good book.

Tom

And well-read, as I see.

Brian

And well what, I’m sorry?

Tom

And well-read. He has a good story to tell and I think from the Brazilian point it’s a story – and we’re talking about democracy, and the transition where we are today – I think many people forget the past and that transition period was very crucial for Brazil.

Brian

That’s right I mean, the book is largely a – it’s not so much a presidential memoir, in fact our original concept with writing the book was that presidential memoirs are boring and so what we decided to do instead was a combination of a memoir and a book that was a history of Brazil’s economy and politics during the 20th Century told through his life and the experiences of his ancestors and his father and grandfather were both generals and his great grandfather was a governor in the Brazilian Interior and so this whole story of Brazil sort of plays out through the book through the experiences of his family but you know it’s interesting just relating this to what we were talking about previously Tom, it does point out – the book does make clear again how much Brazil has changed in his lifetime.

He turned 80 this year and in his lifetime a little more than 80 years, in fact the 80th anniversary was this year, São Paulo engaged in a revolution against the rest of the country. They made their own tanks and many people died. Forty years ago, if my math is correct. Let me just do the math real quickly here. Well okay, nearly 40 years, about 40 years ago we had a military coup and then 25 years ago this was still a dictatorship and so you know you start thinking 50 years ago this was a country where half the population was rural and half the population suffered from varying degrees of malnutrition. I mean this is a place that has come a long way.

Tom

No, I agree with you there because I arrived in Brazil in 1970 and sort of like you, a young kid out of school and that’s when I first realized I was in the middle of a military dictatorship. And then realized what a military dictatorship means. Now for somebody coming out of Bowling Green University in Ohio, that was sort of a shock.

Brian

And so what did a military dictatorship mean when you first got here in 1970?

Tom

Well it first meant that I had absolutely no rights, whereas an American in the States we sort of value and we always to everybody, “Well, I’ve got my rights,” right? But we didn’t have no rights you know. And when I first asked my Brazilian friend, on each street corner at that time were three soldiers. One had a rifle, the other had a machine gun and the third was carrying bullets for the other two, and I said, “What do these guys say before they shoot?” And Umberto said, “Well, they don’t say anything.”

Brian

That’s interesting.

Tom

And that’s where you feel, really that you’re in the middle of a dictatorship and, you know, the military rules so I agree with you and when I look at that context of my time here of what and how much Brazil has changed it is phenomenal. Where we are in [inaudible] it is, it really is.

Brian

Yeah and it’s a bit hard sometimes for a foreign audience or non-Brazilian audience to understand, I mean a lot of countries change over time but the pace of change in Brazil these last 50 years is nothing short of extraordinary.

Tom

Yes it is. Now with that and the transition, so after Fernando Henrique Cardoso left then Lula came in. We can classify that more or less as a surprise but much of what Lula said in his eight years was always against the elite and obviously what you mentioned, President Cardoso, he did come from the elite portion of Brazilian’s history. But he had a very sincere understanding of the country’s difficulties, of the poor, they needed to do things, I mean his background was more along the social lines and basically much of what he did was to help the poor people. How did they lose that transition and how do you think that Lula’s been able to capitalize on that and why hasn’t Mr. Cardoso’s political party used that better?

Brian

Well [there are] a couple of issues here right? First obviously you and I know that just because you come from a privileged background does not mean that you don’t have a social conscience and vice-versa. You know as far as why, I mean a little bit of context here, basically Lula came into power after eight years of Fernando Henrique’s government. For your American audience, people here generally refer to presidents by their first names. Yeah, if he came in after two terms of Cardoso after having lost to Cardoso twice in consecutive elections and the economy improved.

The economy was much better under Lula then it was under Cardoso and Lula maintained a lot of, most in fact, of Cardoso’s policies. Some people even argue that Lula succeeded in part because of, you know, reforms that were made under Cardoso’s government that eventually paid off. As far as why Lula has succeeded in, I guess you could say demonizing Nicolo’s government and his class background a bit, I would say it was effective politicking on Lula’s part [laughs]. Right? I mean, yeah this is a country that continued – that has made enormous progress in the last ten years on the subject of social inequality but continues to be plagued by a massive difference between this rich minority and a poor majority. The poor majority also holds the most votes. And particularly in this most recent election after eight years of Lula, it was convenient and certainly understandable that Lula would try to make the referendum, you know, try to make the election to elect his successor, essentially a referendum on his government verses Cardoso’s.

Tom

Right.

Brian

Because anybody would tell you, “Yeah, we prospered more under Lula’s administration’s administration than we did under Cardoso’s.” It’s just a fact; the economy grew more. Now I do think that a lot of people who lived through that era do understand the point that a large part of what happened under Lula’s government was a sort of positive dividend that came out of the reforms that Cardoso made, specifically doing away with inflation which was 2500% the year before Cardoso took office, but it’s a slightly precious point to make in an election right? I mean, that would be a bit like arguing somehow that the prosperity that happened under Clinton for example, was a product of Reagan’s moves on taxes.

Tom

Right.

Brian

It might be true but it’s sort of a hard point to make in an electoral environment.

Tom

But you feel now that Dilma Rousseff is – understands those both sides, those aspects, she’s done some surprising things here and I think one of the surprise that he was actually referring to Fernando Henrique’s 80th anniversary of the way she positioned herself and specifically the recognition of that.

Brian

That’s right. And you know I think even at some not very, I think at some level, not very deep beneath the surface Lula also recognizes in his heart of hearts the positive things that Fernando Henrique did and maybe for reasons of politics or even for reasons of personality and personal history, Lula just wasn’t able to ever really recognize Henrique’s contributions in a public setting, at least not yet.

Dilma, president Rousseff, has not been inhibited by those things and she’s made quite a show out of her acceptance of and gratitude towards the things that Fernando Henrique did. Part of this is, as ever for political reasons, Fernando Henrique still does enjoy a lot of support from the middle class and Dilma has decided quite wisely that she has a more of an opportunity to appeal to the middle class than Lula did. So some of this is a political calculus as a way of kind of positioning herself to benefit a bit from this apparent, I wouldn’t say it’s an alliance between the two, but they certainly have a friendly relationship.

Tom

Yeah, I think that’s the word, just showing friendship, or showing non-animosity if you want to put it that way, I think it’s good for the country.

Brian

Well it’s a little bit more like the U.S. tradition right? I mean, I remember at one point when George W. Bush welcomed Bill Clinton back to the White house and I think it was for the unveiling of his portrait and it was this big moment where Bush got up there and said some really nice things about Clinton and Clinton admitted to being genuinely touched afterwards.

I mean just institutional respect that presidents have for each other in the United States is not really something that has deep roots in Brazil. That’s not to say that they are mortal enemies in the way that, for example Argentine former heads of State tend to be, I mean there is a congeniality here to both politics and society at large that makes people treat each other reasonable well, but you know that this institutional recognition that even people from the other party have done and can do positive things is a good sign and it’s yet another sign that this is a stable and maturing democracy.

Tom

Right, and that’s what I think, I think showing that diplomatically as Dilma has done, that’s good for business.

Brian

That’s a good point.

Tom

Yeah, and one of the points that you see of companies coming here, I mean you mentioned at the beginning the advantage that Brazil has is the democracy; it’s a pretty peaceful and a robust democracy so I think in that aspect of showing civility amongst presidents, that’s a point to be made. [Over-talking] can feel well, they’re not going to be fighting it’s not going to change and what if Dilma loses or what if somebody else loses what’s going to happen? Basically the feeling today is that nothing major’s going to happen, business will go on.

Brian

Yeah, and Dilma certainly realizes that. And this is a country, I mean you can point to the election of Lula in 2002, one of the reasons why this country really took off after he was elected was because his party, him, Lula specifically and his worker’s party in general, was like a sword of Damocles that was always overhanging this place in previous years.

People held back in the 90’s at various intervals because they thought what’s going to happen when/if Lula and his party get a hold of this economy? They’re going to do crazy things, you know, some people thought he was a communist, some people thought he was a radical and at some point in his history he was, but not a communist, he was never a communist, but you could have described him within the capitalist framework as a radical at certain point in his trajectory, but he changed like a lot of people and then he took power in 2003 and when it became clearer that Lula was going to maintain the basis that had made Brazil start to take off in the previous eight years, that was when this place really boomed because people could look and they could say, you know what, neither of the big parties here is going to do anything crazy.

Tom

Right.

Brian

And they haven’t, and so here we are, you know nearly ten years after Lula was elected and things continue to do really well.

Tom

And we have a female president and she opened up the United Nations and she’s doing different things as well, so the continuity of the process.

Brian

That’s right, and she’s different. You know I mean she talks about, or her advisors talk publically about this being a government of continuity which people kind of imply, I mean it’s fairly clear to everybody that it’s a government of continuity from the eight years of Lula but what it really is, is a continuity from the previous eight years before that. So this is really, we are now in the 17th year of some pretty extraordinary policy continuity which has good things and bad things to it. Good things in the sense that you know what’s going to happen but bad things in the sense that they’re not really going to do anything dramatic about some of the structural problems that we talked about earlier.

Tom

Right. So what you again feel is more of the same?

Brian

I think it’s more of the same. And I think that if you’re…

Tom

But the positive light…

Brian

In both positive and negative ways, I mean people in Brasilia where I spend a lot of time, the fundamental belief from which all other beliefs flow in Brasilia among people in Dilma’s government is things in Brazil are pretty good and they’re going to continue to be pretty good and we don’t really need to do anything that dramatic, which, you know going back to the problems that we discussed earlier might not necessarily be true. We’ll see if people still feel that way if the economy only grows three percent these next two or three years. Two or three years from now if that’s the case you might have some disappointed folks saying, “Hey you know what, maybe we need to do something more dramatic.”

Tom

Yeah, that’s my personal feeling because part of the population has grown from what is known as the “D” class to the “C” class and part of the “C” class has grown to the “B” class and again since everybody forgets the past, sooner or later the “B” class starts thinking, “Maybe this isn’t so good”.

Brian

That’s right. That’s a good point.

Tom

And I think that’s where you said of maybe Dilma Rousseff looking towards that middle class because what they have done, the previous government, is actually focus that; they helped re-create the middle class which for years Brazil didn’t have. So either they cater to the middle class or they may be having problems in the next election as well.

Brian

Well she and her people repeat that point all the time. They know that this place has changed, they know that this is not the Brazil of 20 or even 10 years ago where you had this large group of people in poverty and where you had to, you know, politics in some respects kind of revolved around that, I mean this group that is somewhat derisive in fact very derisive, I hate this word, but this term povel (ph) right? That refers to kind of the people but it has a very classist connotation to it which doesn’t really have much of a place in Brazil anymore. In any case they realize part of the reason that she has made at least a show publically of cracking down on corruption, this is in part of one these initiatives that they have at least spun in a way to impress favorably upon the middle class because they know that that’s going to be the key for them going forward.

Tom

I think that will be. But the other side and back to our educational level, when we look at the electorate in Brazil I think about 60% of that electorate is considered functionally illiterate.

Brian

That’s right. I don’t know that statistic, but that could be true.

Tom

And that is, I was in a meeting this morning at the American Chamber and we’re talking about education and again back to the same thing of why we don’t have enough capable workers to put in the plants, it’s the functional illiteracy, you know. Well you say the people are literate, yes they are, but can you sit them down, can you put them in front of the computer, can you give them a book to read and can they read that book and what will they do about it?

Back to Lula we’ve seen during his tenure he was one of the persons to actually verbalize the fact that he didn’t read books. He sort of valued the fact that he wasn’t educated formally and sort of show that he got where he got based on other things other than education then beat up again on Fernando Henrique because he was a more educated person, a more formally educated person.

Brian

Yeah, I guess that was more politically understandable of Lula to do that, trying to turn a potential weakness into a strength. I have heard people lament the fact that he made in their eyes, he made not having an education seem glamorous but I’ve never heard a Brazilian say, “Oh well, the president didn’t get a good education therefore I don’t have to.” I mean, I think what you see happening right now, and I’ve spent some time with folks who were in this “emerging middle class” and these people tend to really, really understand the importance of education. These people are sending their children to English class and they are insisting that they finish secondary school or high school and they’ve really clued in on what’s important but it’s going to take some time.

It’s going to take some time and you don’t, you know, if that number, you know if you’ve got 60% of the population that’s functionally illiterate you’re not going to “solve” that in just one generation. It’s going to take some time and people are going to have to come around to the idea that they’ve got to work at their schooling a bit.

But again on the subject of education based on the experiences that I’ve had in my short time here I’m pretty constructive on that because these stories of people who were maids or other members of this – you know, doormen and others who have children – these people who I’ve met almost infallibly have children who are in University or at least have finished High School.

Tom

That’s true and they value that, I agree with you.

Brian

Yes.

Tom

Very good, well unfortunately we’re running to the end of our time but I hope to have you back here, we can talk some more and maybe you’ll in the future be writing a book about another former Brazilian president, how about that?

Brian

[Laughs] Sounds good, yeah. That sounds wonderful. And thank you so much for having me on your program Tom, it was fun.

Tom

Thank you, it certainly was. We’ll be back and talk to you in the future okay?

Brian

Thank you.