Lula: Brazil realizes FDI is not only good but necessary!
"Brazil Leader Tailors Pitch To Investors," by Geraldo Samor, Wall Street Journal, 25 June, p. A9.
Luiz Inacio Lula da Silva swept into the presidency of Brazil with the air of a leftist reformer, a man of the people. And yet, he has won plenty of high marks from international observers for his business-friendly domestic reforms.
That's a neat balancing act that says Brazil remains in the Core. Here's the hard part though: "Although Mr. da Silva has won market applause for pursuing sound fiscal policy, Brazil still is struggling to attract foreign direct investment in such things as factories and equipment." The big hold-up according to investors? Government red-tape and poor rule sets on protecting patents and trademarks.
Still, da Silva is right to brag that "in just 18 months in office, we have already passed tax reform, social-security reform. We have approved a regulatory framework for the electricity sector. And Congress is voting on public-private partnerships and a new bankruptcy law."
When the FDI does start to flow, where should it go? No surprise, it's all about infrastructure and logistics to the tune of about $20B a year.
So let me get this straight: assuming you have security that allows your government to function, first thing you do is fix the rules, then that attracts the money from abroad, and then you build up the infrastructure, which in turn ends the bottlenecks on resources, and that'll get your economy growing, which should provide stability and increase marketization?
Brilliant. Simply brilliant.
I only wish I had put something like that in my book. Then blow-hard jackasses like Jack Beatty could read it and realize that my vision wasn't just about globalization-at-the-barrel-of-a-gun.
[sigh]