Lula’s new Brazil has what it takes to have a bright future.  Perhaps

Lula’s new Brazil has what it takes to have a bright future. Perhaps

I stop for a moment to reflect on the numerous reports I have read in recent years in the international press regarding Brazil. A real disaster, where the common thread has always been something wrong that was happening in Brazil or that the incumbent government was provoking. All always written by international observers who didn’t live day-by-day in Brazil but had the theme at heart. First circumstance consideration.

In the same period I observe the evolution of the Brazilian economy and I note some facts that I find interesting. My observatory is less authoritative and I I live in São Paulo for 20 years. Brazil stands out from the rest of Latin America due to its size, not only geographical, but also economic, in fact its GDP is greater than all other countries combined. But the comparison actually needs to be seen in a broader sense, given that the other world economies are not recovering so well from the pandemic either.

Dollar reserves are very large, about 350 billion, and have remained stable during the pandemic. Interest rates fell a couple of years ago to a record low of 2% and then rose to the current 13.75% with very swift action implemented by the Brazilian Central Bank engaged in the fight against inflation, which first rose to 12% and is now down to 7%. Monetary policy has worked and Brazil is the first country to stop raising interest rates and is now moving in the opposite direction. In a world scenario where inflation is a general headache, it makes you think.

Even reading the estimates of two investment banks, respectively Jp Morgan and Morgan Stanley, I note that the GDP will grow by 2.8% this year and there is a lot of encouraging information on the Brazilian economy, together with the fact that many companies have recently been listed on the stock exchange: just think that in 2021 there was a boom with 46 Ipo, therefore a very lively capital market. And in the labor market, the unemployment rate has fallen from 13% to 9% in the last 12 months.

I come to a first conclusion: in Brazil the economy improved overnight while the Minister of Economy Paulo Guedes was sleeping.

I stop for a moment after the elections that literally left a country last Sunday split in two and I read the international press. I have never read so many positive articles about Brazil in such a short time, so much so that I feel intoxicated and happy to live in Brazil. “Without contradiction there is no life,” said Mao Tse-tung.

So in the light of what has been observed, I can only be very optimistic with the new government Lula. He is a politician with great experience and capable of making coalition and far-reaching agreements. This helps because there is a congress that is an expression of the conservative wing and with which he has to deal if he wants to govern and see laws approved. Moreover the senators in Brazil they hold office for eight years, so they go well beyond a presidential term. Lula has already declared that the environmental issue will be one of his priorities and this is a topic very dear to international attention. Thus to the investors who have flocked to Brazil in recent years, first among the Brics to know how to attract direct investments, just as many investors will join who perhaps already wanted to invest before but felt uncomfortable.

I am ready to see Brazil become thegeopolitical alternative, given that Russia and China for different reasons go off the radar of some relevant negotiations, and I am ready to read one side in the international press, the good and perhaps forgotten side of Brazil. Could we perhaps think of a new golden, emblematic moment, the Lula gold standard? (All rights reserved)

*managing partner GM Venture, president of the São Paulo Chamber of Commerce

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