NEOLIBERALISM AND DENATIONALIZATION OF THE ECONOMY OF BRAZIL Fernando Alcoforado * From the government of Fernando Collor in 1990, the neoliberal model was introduced in Brazil based on the Washington Consensus to facilitate the inflow of foreign capital considered necessary due to insufficient domestic savings to finance investments beginning the dismantling of the institutional apparatus mounted in the country from 1930 to 1988. It is considering that context is that one should interpret the political opening of the Brazilian market to foreign capital adopted by governments Fernando Collor, Itamar Franco and Fernando Henrique Cardoso from 1990 to 2002 and maintained by governments Lula and Dilma Rousseff from 2002 to the present time. This is corroborated by the indicators relating to foreign direct investment in Brazil, the participation of foreign capital in the Brazilian industry, the remittance of profits abroad and the domestic and external public debt that have brought increasing numbers over the interests of the Brazilian nation. According to the Brazilian Central Bank, during the Cardoso government, from 1995 to 1999, foreign direct investment in Brazil has tripled rising from US$ 10 billion to US$ 32 billion. With the economic crisis that began in Brazil in the second period of Cardoso government (1999-2002), external capital fell from US$ 32 billion to US$ 15 billion. During the Lula government from 2002 to 2010, foreign direct investment increased 4.6 times increasing from US$ 15 billion to US$ 70 billion. This shows that Brazil has become increasingly dependent on external capital from 1995 to 2010. According to the CVM, the evolution 2002 (US$ 12 billion) to 2006 (US$ 83 billion) of total foreign capital into shares in Bovespa (Bolsa de Valores de São Paulo) demonstrates the growing expansion of foreign capital in the Brazilian economy. The participation of foreign capital in the total Brazilian industry was 36 % in 1991 and reached 53.5 % in 1999 and in the technology sector , foreign capital increased from 60.3 % in 1991 to 86.9 % in 1999 getting demonstrated the domination of foreign capital on the Brazilian industry , especially in technologically advanced industries . One indicator of the degree of dependence of Brazil against the international financial system is the growth in remittances of profits abroad proving how big the field of international monopolies on the national economy is . According to the Central Bank, from 2003 to 2011 , the remittance of profits by foreign companies operating in Brazil abroad grew 6.16 times increasing from U.S. $ 6 billion in 2003 to $ 37 billion in 2011 . The denationalization of the Brazilian economy is still evident when one notes that of the 50 largest Brazilian companies, 26 are foreign, according to the Census of Foreign Capital in Brazil. More than half of Brazils leading-edge sectors (automotive, aerospace, electronics, information technology, pharmaceutical, telecommunications, agribusiness and mining) companies are in the hands of foreign capital. Foreign capital is present in 17,605 Brazilian companies that account for 63 % of Gross Domestic Product (GDP), and has control of 36 % of the banking sector and has 25 % of Bradesco shares and 20 % of the shares of the Bank of Brazil. Even Petrobras, due to the law 9478 of 1997, which led to the end the state oil monopoly, now has 52 % of its capital under private control, and 35 % of this capital is foreign. Recently, to increase the participation of foreign capital in the country, the federal government sent for the approval of Congress on the 20th of last April a provisional measure (MP) that allows an increase from the current 20 % up to 49 % of foreign capital in Brazilian airlines, besides deciding to privatize airports and ports by the end of the year. One of the determinants of economic and financial dependency of Brazil in relation to the outside result of the exponential growth of domestic and foreign debt that exceeds 2.5 trillion dollars in the government Dilma Rousseff. This is contributing to the allocation by the federal government ever increasing budget resources for the payment of interest and amortization of internal and external debt. The funds from the federal government budget for 2013 provided for the payment of interest and amortization of debt corresponded to 43.98 % of the total budget being vastly superior to the values intended to cover expenditure on social welfare corresponding to 22.47 % of budget and transfers to states and municipalities accounted for 10.21 % of the budget. The commitment of almost half of the federal government budget with the payment of the public debt service explains the lack of resources of the Brazilian government at all levels to invest in education, health, infrastructure, etc. and the attitude of all the governments of Brazil from 1990 until the time to privatize the economy and succumb to the dictates of national and international capital under the pretext of lack of funds for investment. If the trend to allocate more resources for the payment of interest and amortization of the public debt is held, there will be fewer resources available for government at all levels (federal, state and municipal) to invest in the future in economic and social infrastructure of the Country. For the Brazilian government have resources for investment in economic and social infrastructure, will have to renegotiate with domestic and foreign banks (creditors of 55% of public debt), mutual funds (creditors of 21 % of public debt), pension funds (creditors of 16% of the public debt) and non-financial companies (creditors of 8% of public debt) reduction in expenditure in the payment of debt service lengthening the payment of interest and amortization of debt. Due to insufficient funds, the federal government, states and municipalities face severe financial crisis in the years in which many will be driven to bankruptcy. This unfortunate situation created by the federal government from 1994 until the present moment only be modified when in command of the nations governors to adopt an economic policy that is the antithesis of the neoliberal and anti-national policy pursued by the current government. * Alcoforado, Fernando, engineer and doctor of Territorial Planning and Regional Development from the University of Barcelona, a university professor and consultant in strategic planning, business planning, regional planning and planning of energy systems, is the author of Globalização (Editora Nobel, São Paulo, 1997), De Collor a FHC- O Brasil e a Nova (Des)ordem Mundial (Editora Nobel, São Paulo, 1998), Um Projeto para o Brasil (Editora Nobel, São Paulo, 2000), Os condicionantes do desenvolvimento do Estado da Bahia (Tese de doutorado. Universidade de Barcelona, tesisenred.net/handle/10803/1944, 2003), Globalização e Desenvolvimento (Editora Nobel, São Paulo, 2006), Bahia- Desenvolvimento do Século XVI ao Século XX e Objetivos Estratégicos na Era Contemporânea (EGBA, Salvador, 2008), The Necessary Conditions of the Economic and Social Development-The Case of the State of Bahia (VDM Verlag Dr. Muller Aktiengesellschaft & Co. KG, Saarbrücken, Germany, 2010), Aquecimento Global e Catástrofe Planetária (P&A Gráfica e Editora, Salvador, 2010), Amazônia Sustentável- Para o progresso do Brasil e combate ao aquecimento global (Viena- Editora e Gráfica, Santa Cruz do Rio Pardo, São Paulo, 2011) and Os Fatores Condicionantes do Desenvolvimento Econômico e Social (Editora CRV, Curitiba, 2012), among others.
Posted on: Thu, 20 Mar 2014 15:54:00 +0000
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