By Fernando J. Cardim de Carvalho
RIO DE JANEIRO, Oct 30 2014 (IPS)

The tight race between incumbent President Dilma Rousseff of Brazil’s Workers’ Party and her opponent, Aecio Neves from the centre-right Brazilian Social Democracy Party (PSDB) party, ended on Sunday, Oct. 26 with the re-election of Rousseff.

As happens in cases of re-election, the new government is, for all purposes, inaugurated immediately, because there is no need to wait until the legal date of January 1 to begin forming the new government and making necessary decisions.

Fernando Cardim de Carvalho

Neither is there a honeymoon in a re-election: voters expect work to begin and some results to show right away.

There is no doubt that Rousseff faces a difficult period ahead. The economy has ground to a halt during 2014 and the perspectives for 2015 are not much better. During practically the whole of the first semester, inflation remained near or above the ceiling of 6.5 percent that was set by the government itself, and the perspectives for next year are not good either.

Balance of payments positions are not comfortable, marked by very high deficits in current transactions and dependence on capital inflows. Social inclusion programmes that were very successful in the recent past may be near exhaustion and will need an upgrade.

Finally, a huge deal was made during the electoral campaign of corruption cases in the administration and in state enterprises, notably Petrobrás, the Brazilian oil company, raising issues that will have to be dealt with by the incoming administration.“There is no doubt that Rousseff faces a difficult period ahead. The economy has ground to a halt during 2014 and the perspectives for 2015 are not much better”

This does not address, of course, another set of difficulties related to the formation of governments in the Brazilian political system, requiring coalitions to be formed with political parties that look like being for rent rather than available for political debates around principles or programmes.

Let us be clear: the situation is uncomfortable on many fronts but is far from catastrophic, no matter how dramatic opposition speeches have tried to suggest.

Things are far better than in Western Europe, for example, where a second recession is very likely to happen in the near future in economies already devastated by the irrational adherence to austerity policies imposed by some governments led by Germany. But the problems the new government will have to face cannot be underestimated either.

Focusing only on the economic challenges, Rousseff’s first task is to try to escape the curse the Brazilian economy has been facing since it achieved control of inflation twenty years ago.

The Real Plan, named after the new currency that was introduced in 1994, was based on the access to cheap imports obtained by liberalising foreign trade and an overvalued currency. To maintain overvaluation it was necessary to attract foreign capital inflows, which required high interest rates (higher than that paid in other countries). High interest rates were also necessary to control domestic demand so that no significant pressure would be applied on domestic prices.

However, exchange rate overvaluation and high interest rates reduced the competitiveness of local producers, particularly in the manufacturing sector, which are very sensitive to exchange rate behaviour.

As a result, the Brazilian economy has lived on a see-saw in these twenty years, alternating periods where devalued exchange rates have allowed some industrial expansion at the cost of accelerating inflation with periods of controlled inflation at the cost of industrial stagnation.

Fernando H. Cardoso was imprisoned by this dilemma, as was Lula da Silva. So was Rousseff in her first term, when she, to her credit, realised that the country had to escape the trap but was unsuccessful in finding the way to do so.

With the international economy in a weak condition, and which is forecast to last, Rousseff has to find a way to promote growth without fuelling higher inflation and increasing external vulnerability, that is, without raising the volume of imports when exports are stagnating.

Bringing the inflation rate down is also needed. Societies tend to have long memories (see how the Germans still react to the hyperinflation they experienced a century ago). A large number of Brazilians still remember how unbearable life was when inflation was in the two-digit figures a month.

We are not anywhere close to repeating that experience, but it has made Brazilians alert and sensitive to any signs that government may be lax in fighting inflation. Besides, 6.5 percent a year for more than three years in a row does add to significant loss of purchasing power for fixed incomes and for those wages and salaries that are not compensated by more generous increases.

Even the greatest triumph of the Workers’ Party administration – social programmes – may be near exhaustion.

The Food and Agriculture Organization of the United Nations (FAO) has announced that hunger is no longer an issue for Brazil. Of course, this is great news but it also means that social policies will now have to be designed with higher aims, to improve the quality of life for the populations that were upgraded by past programmes.

Jobs, education and health are much more difficult to address than extreme poverty, the reduction of which could be dealt with cash transfers. Even if no other important problem was on the agenda, this is a tall order for any political leader, but it is even more so for a re-elected president.

Brazilian citizens are impatient to see how Rousseff will meet the challenge. (END/IPS COLUMNIST SERVICE)

(Edited by Phil Harris)

The views expressed in this article are those of the author and do not necessarily represent the views of, and should not be attributed to, IPS – Inter Press Service. 

Excerpt:

Putting the spotlight on culture. Credit: A.D. McKenzie/IPS

By A. D. McKenzie
FLORENCE, Oct 4 2014 (IPS)

International experts working in the creative sector are calling for governments to recognise the integral role that culture plays in development and to ensure that culture is a part of the post-2015 United Nations development goals, to be discussed next year.

At UNESCO’s Third World Forum on Culture and Cultural Industries, which took place Oct. 2-4 in Florence, Italy, representatives from a range of countries discussed the contributions that culture can make to a “sustainable future” through stimulating employment, economic growth and innovation.

The United Nations cultural agency pointed out that the global trade in cultural goods and services has doubled over the past decade and is now valued at more than 620 billion dollars, although there is some disagreement on this figure.

But, apart from the financial aspects, culture also contributes to social inclusion and justice, according to UNESCO Director-General Irina Bokova, who inaugurated the forum at Florence’s Palazzo Vecchio.“Countries must invest in culture with the same determination they bring to investing in energy resources, in new technologies … In a difficult economic environment, we must look for activities that reinforce social cohesion, and culture offers solutions in this regard” – UNESCO Director-General Irina Bokova

“I believe countries must invest in culture with the same determination they bring to investing in energy resources, in new technologies,” she said. “In a difficult economic environment, we must look for activities that reinforce social cohesion, and culture offers solutions in this regard.”

Bokova told IPS that the forum wanted to show that culture contributes to the “attainment” of the various development goals, which include ending extreme poverty, achieving universal primary education and gender equality, and ensuring environmental sustainability.

Many governments, however, are not investing enough in the cultural or creative sectors even when these industries have proven their worth. Some states prefer to build sports stadiums that are rarely used rather than to support the arts, said Lloyd Stanbury, a Jamaican lawyer in the music business who participated in the forum.

“In the case of Jamaica, we’ve shown that we can compete and win globally at the highest levels in culture,” he told IPS. “Reggae and Rastafari have put Jamaica on the world map and the debate is happening right now about what the government can do to invest more in culture.”

Stanbury said that arts education should have the same status as traditional curricula. “Students are sometimes told, ‘oh, you can’t do maths? Go and draw something’ but their drawings aren’t considered valuable,” he said.

In some developing countries, the arts are seen as a peripheral sector, not a “real” industry and that must change, he argued.

In addition, Stanbury said in his presentation to the forum, in many developing countries, “segments of the music and entertainment community do not enjoy harmonious relationships with government and government institutions, particularly where there is evidence of government corruption that artists speak out against in the creation and presentations of their work.”

For many governments, meanwhile, investing in culture naturally comes a long way behind providing proper health, sanitation and electricity services and developing transportation infrastructure. Yet, culture can help in poverty alleviation, job creation and peace building, experts said.

Peter N. Ives, Mayor pro tem of the U.S. city of Santa Fe, New Mexico, detailed how the city had invested in the arts, through allocating one percent of hotel-bed taxes (or lodger taxes) for cultural activities, among other measures.

“Santa Fe now has more cultural assets per capita than any other city in the United States,” he said, adding that “inclusion” of all groups was a key element of the policy, in which “everyone brings their creative gifts to the table”.

The city has an Arts Commission, appointed by the mayor, that “recommends programmes and policies to develop and promote artistic excellence in the community” and it has followed a multi-cultural route.

The result is that Santa Fe has increasingly drawn writers and visual artists, as well as tourists, because of its growing number of museums, performances and outdoor sculptures – also one of the reasons behind its designation as a UNESCO Creative City.

Such “success stories” may seem far-fetched for many poor or middle-income countries, faced with a variety of crises including conflict. But experts at the conference described grassroots schemes where intra-community violence, for instance, decreased when community members were actively encouraged to produce art about their lives.

Other representatives examined how creating film and literary festivals had contributed to a sense of national pride and cohesion. In the Caribbean and in parts of Africa and Asia, for example, the growth of festivals and cultural prizes has given a general boost to the arts in some countries, reflecting what wealthy countries have known for some time.

The forum, jointly organized by UNESCO, the Italian government, the Tuscany region and the Municipality of Florence, also examined how culture can be preserved in war-affected regions, with a focus on recent UNESCO cultural heritage preservation projects (funded by Italy) in Afghanistan, Mali and other states.

Denmark and Belgium, meanwhile, provided a look at how overseas development aid to cultural activities can promote employment, training and youth involvement in society, especially within a human rights context.

“We’re living in a very hostile environment for development cooperation and also for culture and development, but I’m launching an appeal for more cooperation in this area,” said Frédéric Jacquemin, director of Africalia, a Belgian organisation that sees culture as “a motor for sustainable human development”.

Participants in the forum produced a ‘Florence Declaration’ calling for the “full integration of culture into sustainable development policies and strategies at the international, regional and local levels.”

The Declaration said that this should be based on standards that “recognise fundamental principles of human rights, freedom of expression, cultural diversity, gender equality, environmental sustainability, and openness and balance to other cultures and expressions of the world.”

(Edited by Phil Harris)