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Interview: Brazilian economist Carlos Lessa

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Interview: Brazilian economist Carlos Lessa

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euronews’ Miguel Sardo:
‘‘Carlos Lessa is a professor of economy and joins us from Rio de Janeiro. He is former president of Brazil’s development bank and also taught the two presidential candidates when they were at university.’‘

Professor, why have you chosen to support the candidacy of Jose Serra and not Dilma Rousseff, even though she has promised to pursue the current economic policy, which clearly appears to be a success?’‘

Professor Carlos Lessa:
‘‘Basically because I’m opposed to continuing the policy of the central bank and Dilma has promised to keep it’s chairman and follow its current policy.’‘

euronews:
‘‘And why is this issue so important in your choice between the two?’‘

Carlos Lessa:
‘‘Very briefly, the Chinese yuan only saw a re-evaluation of 3 percent against the dollar. Do you know the currency which has been revalued the most in the world against the dollar. It’s the Real. This means Brazil is losing its role as a country which exports industrial products and is basically in the process of once again becoming a supplier of raw materials.’‘

euronews:
‘‘Professor, more generally, are there clear economic differences between the two candidates, even though the economy has not been a major feature of the campaign?’‘

Carlos Lessa:
‘‘No, My analysis is that the prestige of president Lula is huge with a popularity rating of 80 percent. The Lula backed candidate and the candidate of the opposition, Serra, have both tried to protect the image of the president. The debate has focused more on who is the most competent rather than their manifestos.’‘

euronews:
‘‘Generally, what should the next president’s priorities be? For example, there is much talk about a problem that has to be dealt with in the short term, the question of inflation, something you’ve also highlighted. A re-valuation of the Real could also hurt the country’s exports. How do the two candidates propose to solve this?’‘

Carlos Lessa:
‘‘In the past 50 years Brazil has had GDP growth of up to 7 percent per year. The last 25 years saw growth of 2.3 percent, now during the Lula years it’s improved a little to about 3 percent but this is absolutely mediocre growth. What is fundamental for this country is to raise the level of investment and GDP. The level of investment in Brazil is very, very, low. It’s 18 percent. This is terrible. We need at least 22 percent to be able to guarantee 5 percent growth each year. But the policy of the central bank does not allow this. I’m for Serra because I’m convinced that if he becomes president he will replace the head of the central bank and as a result the current monetary policy will be changed.’‘

euronews:
‘‘Let’s talk a little about another important issue. Today we speak about the colossal size of Brazil’s domestic market and the importance of pursuing social policies. Do you believe the new international economic role of Brazil may adversely affect in some way, these social measures?’‘

Carlos Lessa:
‘‘I don’t see any reason to believe that, because the social measures in Brazil are unfortunately still very, very small compared to Brazil’s economy. What is huge in Brazil is the size of interest payments. To get an idea, barely 37 percent of Brazil’s national income is generated by work. 63 percent is generated by other means. This policy of very high interest rates in Brazil is an efficient anti-inflation policy, but has a enormous price in terms of economic stagnation.’‘

euronews:
‘‘Thank you Professor Carlos Lessa, former director of Brazil’s economic and social development bank and also the former professor of the two candidates who will go head to head in Brazil’s presidential elections this weekend.’‘