Brazil's New Key Interest Rate Shows Central Bank's Arrogance, Says Industry Federation
Written by Newsroom
Thursday, 09 March 2006
In a note on the decision by the Monetary Policy Committee (COPOM) of Brazil's Central Bank to lower the annualized benchmark interest rate (Selic) by 0.75% to 16.5%, the president of the Federation of Industries of the State of São Paulo (FIESP), Paulo Skaf, complained that "once again the COPOM has high-mindedly reasserted its absolute independence." The 16.5% rate will remain in effect for the next 45 days.
In the note, Skaf claims the decision shows that the Central Bank "does not care about the moderate pace of inflation; is unconcerned about Brazil's ridiculous current growth rate; does not share the ideas of the majority of economists; and dismisses the critical arguments presented by the productive sector."
The FIESP president goes on to question whether this attitude "represents autonomy or arrogance."
The Federation of Industries of Rio de Janeiro (FIRJAN) also issued a note, stating that "it is essential for the drop in interest rates to be accompanied by measures that permit the expansion of productive investment in the country, an indispensable prerequisite if there is to be long-term development."
The Copom has reduced Brazil's basic interest rate, the Selic, by 0.75 percentage points, lowering it from 17.25% to 16.50% per year. Copom has been steadily and gradually reducing the Selic since September of last year. Since then the rate has fallen 3.25 percentage points.
A note from Copom says the decision was by a 6 to 3 vote, with the three other votes in favor of a bigger reduction of one percentage point.
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Brazil received a huge boost in its international image with its selection as the host of the 2016 Olympics, but it was really just the cherry on top of the overall recognition of the country's ascension to the ranks of one of the world's most important countries. Now, as it finally takes its place on the world scene, there has been a great deal of concern about what kind of image Brazil hopes to project, now that the world is really paying attention. 
The only good thing to say about the visit to Brazil of Iran's president, Mahmoud Ahmadinejad, on Monday November 23, is that it was mercifully short and lasted less than 24 hours. Ahmadinejad had his picture taken being hugged by president Luiz Inácio Lula da Silva who gave him a warm welcome and said Iran had every right to develop nuclear energy for peaceful purposes. 
The small, coastal town of Condé is located just a twenty minute's drive from João Pessoa, the capital of Paraíba. The Northeast of Brazil has historically been a place of encounter and mixing between peoples. For millenia groups of indigenous people fished, farmed, migrated and sometimes fought along this large, fertile area. 
The Brazilian diplo-MÁ-cia (bad diplomacy) carries on its accelerated course towards the non-acknowledgment of human rights, although sometimes it takes pleasure in saying that it does precisely the opposite. The visit of Iran's president, Mahmoud Ahmadinejad, is another example of a diplomatic omission that verges on hypocrisy. 
On July 4, 2006, representatives of Argentina, Brazil, Paraguay and Uruguay met in Caracas to sign the protocol for the entrance of Venezuela into the Southern Common Market (Mercosur). After two and a half years, the protocol was approved by the legislative bodies of Argentina and Uruguay, and as of now it may be only days away from being ratified by the continent's economic megalith, Brazil. 
Some sectors of the fight against AIDS have suggested that Thabo Mbeki, the former president of South Africa, committed genocide through his absence from the fight against the illness in his country throughout his two terms. 
One hundred and eleven years after Brazil abolished slavery, the number of workers deprived of their freedom is still huge. They raise cattle, produce charcoal, sugar cane or timber. Some of them, most undocumented Bolivians, work in basements of small apparel factories in São Paulo and other metropolis. 
On November 7, 2009 a few friends and I had an opportunity to take a look inside a Brazilian jail outside the city of Rio de Janeiro. We were able to take some amateur footage of our experience on video (see link below). It's no surprise, of course, that the typical Brazilian jail lacks some of the functionality of those in North America or Europe, but our experience that day was quite shocking. 
Depletion of the Amazon Rainforest is not a new concern facing environmentalists, biologists, ecologists, and a growing number of the Amazonian indigenous peoples. For decades they have feared for the fate of the world's most biologically diverse and species-rich hothouse. 
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