Cornel Ban in Financial Times on Brazil Election Results
Assistant Professor Cornel Ban of the Frederick S. Pardee School of Global Studies at Boston Univeristy wrote to the Financial Times to comment on how the results of the Brazilian elections suggest a divided country and that “given the large reductions in inequality obtained by government programmes financed by the commodity boom, [President] Dilma Rousseff’s narrow victory was disappointing.”
In a letter published in the Financial Times on October 30, 2014, Prof. Cornel Ban writes:
The PT Workers’ party’s inclusive growth policies gave the many winners of the PT’s socio-economic policies higher expectations about the good life, which means that the government has to get its act together on providing better health, education, public transit and income support for the poor. This must happen in tandem with policies that can increase the investment rate, further diversify its economy and modernise the sclerotic sectors of the state bureaucracy. The onset of a new gloom in emerging economies and the end of the commodity supercycle will certainly make the job harder.
It is also less clear that financial markets will force an adjustment on her administration simply because Ms Rousseff has a penchant for leftist interventionism in the economy. President Luiz Inácio Lula da Silva’s election run more than a decade ago was also greeted by a stiff sell-off. Although he enacted policies that were far to the left of the policy status quo following his landslide victory, markets were in fact bullish on Brazil. Markets regularly deviate from economic orthodoxy and this is all the more true when it comes to countries like Brazil, who have reduced their dependence on foreign creditors. Brazil may be politically divided on Ms Rousseff, but PT’s commitment to and proven record at shrinking class differences made Brazil less economically polarised. Evidence shows that this is good not only for democracy and labour but also for the domestic financial stability, higher demand and higher productivity that capital wants.
He concluded by arguing that “the results of the presidential election indicate a demand for recalibrating PT’s agenda, not its evisceration through an orthodox credibility shock.”