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Many see the New Left spreading rapidly through Latin America today: Presidents Lula in Brazil, Nestor Kirchner in Argentina, Hugo Chavez in Venezuela, Evo Morales in Bolivia, Rafael Correa in Ecuador, Tabaré Vasquez in Uruguay, and Michelle Bachelet in Chile are all considered part of the Left. Though they are often treated as part of the same phenomenon, these leaders are completely different from one another. And not all of them even represent the Left.
Last week I interviewed a Swiss economist, a board member of UBS Bank Klaus Wellershoff, about the global economy during his brief visit to Rio de Janeiro. My first question was about the risk of recession in the United States, a country which has long held the power to determine the pace of the world economy. His first sentence changed the entire direction of my thinking: “The world consists of more than the US,” he said.
The planet is now facing an emergency. According to scientists, the situation is terrible – and at the same time presents a new opportunity for humankind. We face a decision with only one right choice: to save our Earth.
What kind of decline are you talking about? France is showing strong commitment to the democratic process, and that process is bearing fruit. This first round of voting has been characterized by many novelties: both winners are from a new generation of politicians, voter turnout was very high, the ultra-right was defeated, a competitive woman made it to the runoff vote, and there was strong support for the centrist candidate. It seems that France is engaged a process of renewing its political elite, rather than doomed to decline.
Last week I was at a formal dinner in Canada when a woman seated next to me started to complain about the weak dollar. The Canadian dollar has been strengthening against the U.S. dollar, throwing bilateral trade into disarray.
The woman was an official from Export Development of Canada, but she might as well have been a Brazilian official. Brazilian authorities have the same complaint about the weakening dollar. In the beginning of 2003, Brazilians needed 3.5 units of their currency, the real, to buy one dollar. Now they need only 1.7. That’s a 50% drop, and it just keeps falling.
The Current Discussion: In the future, global prosperity will present more of a threat than poverty, according to a recent Post op-ed. Is this just rich-American rhetoric, or is the world really getting too prosperous for its own good?
The basic dilemma is this: Should the world follow the United States’ pattern of consumption to raise its people’s standards of living? Or should the world, including the United States, look for another way of life?
The Current Discussion: If countries around the world are doing so well economically, why are they still catching a cold when the United States sneezes?
Brazil is very proud of itself. For the first time, we remember we’re in a good position relative to the outside world: very low foreign debt, no outstanding foreign currency liabilities, and record high hard-currency reserves. Governmental authorities have assured us that the Brazilian economy is as shielded from outside turbulence as it has ever been. Thousands of middle-class Brazilians who have been hurt by the several financial crises of the 1990s invested their money in the stock market. In December alone, 100,000 new small investors made their debut in Brazil’s market. Despite good fundamentals and widespread optimism, the Brazilian Stock Exchange plunged into a free fall this Monday. To us, it seemed to be even more unfair because Americans were on their civic holiday, aloof to the turmoil of which their country was the epicenter. Actually the American people, especially the poor, have been bleeding since the beginning of the sub-prime crash.
The Current Discussion:The global economy is quaking. Are we heading toward a global recession? Who's to blame?
During the American inflationary surge in the late 1970s, the Fed raised interest rates to sky-high levels. Latin America was its first victim. Her external debt snowballed and the region entered into a deep recession. The 1980s are known as the “lost decade” in our economic history.
Things are different now. The largest countries in South America are accelerating their growth rate while the U.S. is falling into a recession. Argentina and Venezuela are struggling with an old Latin American enemy: high inflation. In Brazil, however, the inflation rate is right on the Central Bank’s target, the external indicators are better than ever, and we are on the eve of being rated as an investment-grade country. For the first time in decades, our private and public external debt is lower than our international reserves, which means Brazil has a negative external debt. Consumption is growing, fueled by rising incomes and the first expansion of credit in our recent history. Truck sales have increased by 40% last year; auto sales, by 36%; growth of durable goods sales has averaged 20%. Brazilians drink more Coke than the Chinese; the country is the third market for Coca-Cola, only behind the U.S. and Mexico.
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