Economy & Energy
No 32: August - September 2002  
 ISSN 1518-2932

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Electric Energy Generation in the 2020 Horizon and Angra III


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Brazil – Energy in 2001
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The Vanished  Fantasy

The Fund Rides Again

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THE FUND RIDES AGAIN

 
 Simultaneous Publication  of Jornalego and e&e

Genserico Encarnação Júnior
genserico@ecen.com

            Two issues of JORNALEGO were already in the "out tray" to be sent to my selected readers - the present one and the next after ten days - when I decided to stop them. Initially, a better reflection about the examined matters made me take this decision. I noticed that I was considering too seriously the newspaper's suffix, namely ego. Instead of justifying it by being the only editor, I was taking the risk of becoming its main theme. A good dose of self-criticism and some restrictions to prevent the ego from becoming naughty can do no harm. The articles written in the first person singular were about religion and death. Besides that, they could hurt some friends' feelings. However, if someone wants to read them, I can send them privately. 

I was rescued by the superego and also by the present national situation marked by the most recent agreement with the International Monetary Fund. 

In the week that is just ending, the Federal Government, the media and the financial and exchange markets are celebrating it. The expectations of the official candidate for the next presidential elections are exacerbated even though his position in the public opinion polls continues to be poor. On the other end, the middle class went to bed less preoccupied after the daily soap operas and the evening news. The presidential elections can be held with no problems because the red carpet has been laid for an honorable exit of the neo-liberal government and the inauguration of the new administration, duly committed. 

In my opinion what really happened was that it was recognized that we are insolvent; once again the model is collapsing, demonstrating that this insensate and insensible neo-liberal policy of the most recent "Fernandos with an Itamar in between" period[1] is unsustainable. The indignation is such that in the present paragraph I have used the "in" prefix several times. Dammit! 

The agreement value is US$ 30 billion. That is the amount we will have to pay until the end of 2003. 

The agreement was made due to the strong pressures of the American banking system on the Bush administration aiming at guaranteeing the return of their money applied here as well as not killing the chicken with the golden eggs. The pressure had the scenario of a speculation wave provoked by the same distinguished actors.

 Therefore, the dough will not even pay taxes in Brazil; it will remain there in a mere electronic transfer to be added to our debt to the IMF, increasing the creditors’ account, increasing their profits. A huge lobby, a large liability without the corresponding assets, i. e., nothing will change in what regards the quality of life of the Brazilians. History has shown that there is no alternative; the expected compensation  is more recession, more unemployment, more poverty, more dependence and possibly even more inflation.

This is the inheritance of 12 years of the neo-liberal experience, embarrassing the resuming of our frail democracy and undermining the institutions that support it. Our Congress acted as a yes man, starting with the constitutional amendment regarding presidential re-election up to the coexistence with the torrent of provisional laws, votes of the Congress leaders and other illegitimate acts.

 Some positive things were achieved, of course. I hurriedly mention the monetary stabilization of the Real Plan before someone uses it as a counter-argument to contest this sketched criticism.

“The evil that man do lives after them; the good is oft interred with their bones” *               

The price paid is very high. In what concerns the monetary stabilization, the inflation during the eight years of the Fernando Henrique Cardoso administration will be around 130%. Neither my salary nor that of anyone has been corrected by this index. In this period the participation of salaries in the GDP dropped from 33% to 27%. Like the eighties, the nineties was a lost decade.

And what about the privatizations? We have consumed assets worth billions of dollars without decreasing our debt that has rather increased instead of transforming it into social welfare. The steel industry, the mining, petrochemicals and telecommunication sectors, a large part of the electrical energy industry, the banking system and whatever was available to be consumed have been sold at a vile price.

The celebration regarding the Fund agreement is due to the need of the current model to fill an annual hole of US$ 50 billion – 30 for the debt service and 20 for the  balance of payments account. One billion dollar every week! That will not be ended with this agreement.

It is like the father who warns his teenager son to drive his car carefully, attentively, at low speed, avoiding any inability. Suddenly an accident happens. To ask now the presidential candidates of the opposition if the Fund agreement has their approval is like asking the father of the injured son if oxygen should supplied to him and if he should go to the intensive care unit in spite of all that his father said about the possibilities of the inevitable accident.

The Government’s celebration and that of his followers regarding the agreement could have as justification a cynical argument such as the following: the more we are linked to the United States and to the International Financial System, the better for us. Therefore they would not bankrupt our country. In other words, don’t sink the boat where we are all sailing.

This rationale, if it exists at all, besides being cynical, is partial, clearly financial while the bill continues to be paid by the populace. The IPEA, an organ of the Planning Ministry shows that the number of poor and miserable people in the country, that was respectively 33 and 17 million a decade ago, has now exceeded 50 and 20 million.

Right now we have a conflagrant Latin America. Riots in Caracas and Santiago. Colombia continues to cope with the guerillas. Argentina and Uruguay live in a stressed situation. Incidentally, Argentina has been discriminated by the United States and the IMF concerning the aid that has been granted to Brazil and Uruguay. We live in a tight rope because we have adopted the same model. Some time ago it was said that we were taking the risk of becoming Belindia (half Belgium, half India). Presently with violence and drug-smuggling on one hand and the fragile financial stability on the other hand we are doomed to be transformed into Colombina (half Colombia, half Argentina). The IMF agreement does not prevent us from suffering from the ailments like those of our neighbors, it is a mere palliative. The crisis is postponed. As a journalist has written today, a longer rope has been put around the neck of the condemned.

My hope is that my ideas and convictions continue to be mistaken as has been thoroughly demonstrated by the arguments (sensu lato) of the conservative right wing followers always more convincing et pour cause “united and never defeated”.

 * From Marcus Antonius speech in William Shakespeare’s Julius Caesar.

Editor’s note : Jornalego has been created by Genserico (precursor and founder of e&e) after his retirement. Sometimes, as we have mentioned in the previous issue, he digresses about economy like now.

[1] President Fernando Collor de Melo (1990/1992) was impeached and substituted by Vice-President Itamar Franco (1993/1994). Fernando Henrique Cardoso (1995/2002) was re-elected after his first mandate.


The JORNALEGO issues cam be found at:

 
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Revised/Revisado:
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