Source: BrazilEconomy Updates (e-mail)
by Rami Alhames 23/06/2012
Among two conversations with 2 taxi drivers in downtown of Sao Paulo, I concluded how much Brazilians love their country and hate politicians and economist actions towards it. Looking into Brazilian citizens eyes, asking them and negotiating that the coming days are harder than what passed left me wondering why the government is not doing enough!
Back to golden days of 2010 and its high 10.5% GDP growth; Brazilian middle classes had sensed, for the first time since long time, the hope of better future which start fading in the end of 2011 with raise in unemployment and inflation rates. However, 5.8% of unemployment rate in 2012 is still considerably low with nearly ZERO economic growth when it compares with European countries, wrote Kenneth Rapoza in Forbe, Brazil Discovers How To Increase Employment With Near-Zero Economic Growth:
How the country managed to do this is unclear.
Brazil has the opportunity to fulfill its demand of (mão de obra) working forces until 2016 where it must meet its commitments to WorldCup 2014 and Olympics games Rio 2016 beside its huge construction program of (Minha casa minha vida) “my house my life” to construct cheap popular houses.
Although, Brazil need a completely makeover operation to its infrastructure, I’m not sure that the next governments are committed to do so. Therefore, Brazil need a new vision beyond Lula’s Magic 8 years which can’t continue for ever.
Is it a bad sign for their markets or just a proactive step?
The giant BRICS partners and emerging markets, Brazil and China, in order to protect their economics and minimize risks from another economic crises have signed a $30 billion currency exchange pact on Friday 22 of June 2012. The deal will commit both Central Banks to set aside money to help one another in case global credit dries up, said Forbes.
“We recognize that developed economies are still in crisis. The BRICS are the most dynamic, and we’ll continue to expand,”
Brazilian Finance Minister Guido Mantega said at a press conference at Rio+20.
The future is promising for the “Country of future” but does its leader know the path to achieve it?