SHARMINI PERIES: Welcome back to The Real News Network. I'm Sharmini Peries coming to
you from Baltimore.
I'm in conversation with Alfredo Saad-Filho. He is a professor of political economy at
the School of Oriental and African Studies, SOAS, at University of London. And he was
a senior economic affairs officer at the United Nations Conference on Trade and Development.
Good to have you back with us, Alfredo.
ALFREDO SAAS-FILHO: Thank you.
PERIES: So Alfredo, in our segment one, we talked about how these March 15th protests
came about, who's responsible. So if you haven't watched that part, please go back and watch
it. And this segment is going to be dedicated to more of the national issues that the PT
government is trying to deal with. And number one on the list is really the corruption that
this PT government who's been in power for so long has not been able to really tackle
very well. Why do you think that is the case, Alfredo?
SAAD-FILHO: There are two reasons for this. One is that corruption is profoundly ingrained
in the structure of the Brazilian state, and that has been the case for the past 500 years.
The more specific reason is that the financing of political parties, the financing of elections
in Brazil, at the moment the way they are structured inevitably will involve corruption.
Campaigns are, political campaigns, are extraordinarily expensive. These campaigns are financed primarily
through donations coming from large companies. And that will be legal, according to the letter
of the law, and perhaps rightly so. But the fact is that the campaigns have to be financed
somehow and they will involve transfers, illegal transfers, from companies to political parties.
This is the story, and it involves most political parties in Brazil including the PT, but the
other ones too. And this has been, has come to light in a number of scandals. More recently
the excuse for the current wave of demonstrations against the Rousseff [inaud.] administration
and the umbrella under which all wings of the opposition have been sheltering themselves
is the Petrobras corruption scandal. Petrobras is the state-owned oil company in Brazil.
It is one of the--it is the largest company in Brazil, one of the largest oil companies
in the world. And it has been found recently that a small number, a very small number of
directors of this company were using that position not only to enrich themselves but
also to channel funds from companies, usually companies involved in the oil supply chain,
to transfer money from those companies to assorted political parties including the PT,
but also several other political parties. But this scandal has catalyzed the current
wave of political demonstrations against the government in Brazil.
PERIES: All right Alfredo, let's set aside the issue of corruption for a moment and then
look at the economy and how the PT government might have failed the people, particularly
those at the most marginalized parts of our society. One thing very interesting about
the Brazilian economy is that right through the economic crisis the rest of the world
was facing, that is the 2007-2008 crisis, Brazil was somewhat the poster child of how
it survived that crisis and a lot of international money actually moved to states like Brazil
and India during the crisis.
Now, why then this sudden fall? It was doing well and then suddenly we see the economy
taking a dive. Why is this happening?
SAAD-FILHO: This is because of a tragedy and a miscalculation. The tragedy is that Brazil
did very well during the commodity boom of the early 2000s. When the crisis hit the economy
contracted, but Brazil recovered very rapidly from the crisis. Along with China, South Korea,
and other countries, Brazil implemented very aggressive fiscal and monetary policies against
the crisis, and came out very strongly already in 2010. that was a significant economic policy
success.
Since then however, the government in my view miscalculated by believing that the consequences
of the crisis, of the global crisis, wouldn't be as severe as they turned out to be, and
they thought the crisis wouldn't be so prolonged as it turned out to be as well. As this unfolded
gradually, the government lost resources and steam to continue pushing the economy forward
and maintaining [inaud.] the fiscal deficit started increasing, inflation started creeping
up. External resources that were flooding into Brazil, into Turkey and other developing
countries because of quantitative easing in the U.S. and in the UK, those resources started
[moving] back to their countries of origin and the Brazilian economy nosedived. This
is a serious problem.
Having said this, until very, very recently, until the beginning of this year it was said
in Brazil and this is probably true that no one had [inaud.] as a consequence of the crisis.
The economy was floating. Not growing very fast, but it was not in a recession. The recession
starts now.
PERIES: Now, tell us a bit more about why during the success, during the growth period
when the economy was doing so well why the PT, Workers' Party--more left-thinking, more
socialist in their outlook--was unable to deliver programs and support to the poorest
in the country. Particularly given Lula took office on the Zero Hunger campaign, which
was partially successful. But it abandoned those programs towards the time when Dilma
Rousseff took power. Why did that happen?
SAAD-FILHO: The social programs implemented by the Lula administration, and by the Dilma
Rousseff administrations, have been very successful. The Bolsa Familia programming in particular
was launched as you mentioned by Lula under the previous name of Fome Zero, Zero Hunger
program. And it now covers 14 million families in Brazil. That is about a quarter of the
population of the country directly benefit. These are benefits that are very small, but
they are significant for people who earn very, very little. And they also provide a bedrock
of demand for the economy.
There are other social programs as well including social security, including health, including
a significant expansion of education at all levels and so on. So these programs were large
and they were successful. They were also cheap. There's a limitation to the social programs
of the PT, is that they usually did not have a sufficient amount of resources to transform
the life chances of many of the poor. Although they did transform the life chances of many
people who previously could not go to university but now they can, because the expansion of
the sector [inaud.] quotas, and people who could not have accessed health services but
now they can because of a substantial expansion of health provision in the country.
These were successful programs and they deserve to be commended, except they were limited
to some extent and they should have been backed up by a significant expansion of infrastructure
as well. This is [inaud.] missing, in my view.
PERIES: And what will be required, and is it still possible for the Dilma Rousseff government
to develop and implement more sustainable economic development plans for the most vulnerable
in the society?
SAAD-FILHO: This is now very difficult. Because the government has been pinned down by the
lack of political support, by the most right-wing Congress in a generation, and by its isolation
from significant, very large sectors of the population, particularly the most privileged
segments of the population. On top of all these internal difficulties, the global economy
is not growing so Brazil does not have an external engine of growth either.
So in view of all these [inaud.] I think it would be very, very difficult for the Dilma
Rousseff administration to recover and to maintain, much less to expand, these social
programs that currently benefit a large part of the Brazilian population. I do not expect
this government to be very successful.
PERIES: And so hence do you think there is a greater possibility that the rise of the
right will continue to gain momentum in Brazil?
SAAD-FILHO: I think this is unfortunately the most likely scenario at the moment. With
a government that is by and large paralyzed and unable to launch a political or economic
initiatives, and with the isolation--ideological and institutional isolation of the PT core
of the Rousseff administration, it is unlikely that the left will be able to come out of
this corner in which they have been placed, which is also likely that the social movements
that have been traditionally aligned with the PT will be able to rise in defense of
the Rousseff administration. They haven't been able to do this so far, at least.
And for these circumstances the most likely outcome is that the Rousseff administration
will limp along unable to take significant initiatives, and simply counting the time
until the next elections. This is unfortunate but I think it's the most likely scenario.
PERIES: Alfredo Saad-Filho, thank you so much for joining us today.
SAAD-FILHO: Thank you very much.
PERIES: And we look forward to having you back.
SAAD-FILHO: Thank you.
PERIES: And thank you for joining us on The Real News Network.