Is Brazil Really on the Verge of a Crisis Like Greece’s?
Brazil is having a horrible 2015, dogged by headlines like “Brazil in Crisis” or “On the Brink." But to seasoned observers, Brasil Wire argues, such language is sensationalist and excessive, particularly in the context of the ongoing situation in Greece.
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The English-language site Brasil Wire questions what foreign and Brazilian media outlets have to gain from printing “zombie narratives” about a country in crisis and a president without a mandate.
From Brasil Wire:
Brasil is having a horrible 2015; a far less favourable global economic situation, a number of policy misjudgments made early in President Rousseff’s first mandate and rolling scandals that have followed 2014’s election have resulted in flurry of headlines both at home and abroad decrying “Brasil in Crisis” or “On the Brink“.
However, to seasoned Brasil observers, and in the context of the ongoing situation in Greece, this kind of language is sensationalist and excessive. 2015 will be the worst GDP contraction in 25 years but this is a sledgehammer statistic which does not get near describing the situation alone. Will it be a bad year for Brazilian workers? Yes. Are we likely to see roll backs in the impressive gains Brasil has made tackling inequality and hunger? Possibly minor. Will Brasil lose its hard-won Investment Grade status? Maybe, depending on who you talk to. But the real question is, will the Brazilian government be walking cap in hand into the International Monetary Fund asking for assistance, or risking a default on debts? No.
In context, back in 1991, Brasil was the 9th biggest economy in the World. By the time Fernando Henrique Cardoso left office, it had fallen below India and Mexico to 13th. Now it is 7th. It was briefly at 6th during fallout from the Global Financial Crisis, by which Brasil was one of the countries least affected, not least because of protective financial regulation that in 2007, the Friedmanite Priesthood at the Economist had admonished…
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—Posted by Natasha Hakimi Zapata
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