"Fernando Henrique Cardoso on Brazil's future"

The Economist continues to be a great source of information. This time they interviewed Fernando Henrique Cardoso, the former Brazilian president from 1995-2002 and still a very important voice for the nation.

"Fernando Henrique Cardoso on Brazil's future".

Cardoso shed some light on the most important topics involving Brazil today. He gives his input on a variety of topics, including the country being a world soft-power, development, corruption, politics and on economics (Cardoso is the father of the Real - the Brazilian currency - and his policies as minister of finance and as president make him responsible for a great part of the economic success that Brazil is having today).

Below are two answers that I consider very insightful.

Corruption:

The Economist: Is corruption increasing?

Cardoso: Always we have had some degree of corruption, here and there, but the system was not corrupted. Now the system allows corruption as a normal ingredient. Everyone knows that when you organise a cabinet you have to share power with parties. But you are not sharing power, you are sharing opportunities to have good contracts.

The Economist: Was that not the case for you?

Cardoso: No, no, no. Maybe in one or another case, but now the whole system is based on this. This is novel. It’s a very bad development. In the political culture flexibility has become… not flexibility, but tolerance of crime. You have institutions, you have tribunals—but nobody is in jail.

Economics:

The Economist: Now money is flowing in and there is the opposite problem: the real is incredibly strong.

 Cardoso: It’s a big problem. Now we have no alternative other than to increase productivity. But the problem with productivity is now not inside the firm, it is outside. It is government; it is roads; it is taxation. What has to be done is a long story, but the government has to rationalise, to do some reforms. Some are very idealistic—such as tax reform—but they are necessary. Look at the tax burden: it is up above 36% of GDP. Our GDP now is over $2 trillion. Thirty-six percent of $2 trillion is a lot of money. But they are expanding the bureaucracy; over-expanding without taking into account the need to renew infrastructure or concentrate on education. The population will react against still more tax increases. This has to force the government to be much more rational in the use of this money.

Full article at: http://www.economist.com/blogs/americasview/2012/01/fernando-henrique-cardoso-brazils-future-0