{"id":31771,"date":"2015-12-21T05:24:40","date_gmt":"2015-12-21T04:24:40","guid":{"rendered":"http:\/\/www.w-t-w.org\/en\/?p=31771"},"modified":"2015-12-21T05:25:05","modified_gmt":"2015-12-21T04:25:05","slug":"31771","status":"publish","type":"post","link":"https:\/\/www.w-t-w.org\/en\/31771\/","title":{"rendered":"Can Barbosa Turn Brazil Around?"},"content":{"rendered":"

Raymond Colitt and Anne Edgerton write: \u00a0Nelson Barbosa could, of course, turn out to be the man who fixes Brazil\u2019s finances, tames soaring inflation and revives the sinking economy, but investors sure aren\u2019t betting on it.<\/p>\n

He replaces Levy, the market\u2019s golden boy, with his University of Chicago-training, asset-manager experience and reputation as a fierce budget cutter. Barbosa, while generally respected by analysts for his technocratic skills, isn\u2019t seen as being quite as tight-fisted on spending, a perception he only reinforced when suggesting that he was amenable to granting subsidies to some industries.<\/p>\n

What\u2019s more, the crisis that Barbosa will step into when he\u2019s officially sworn in is markedly more severe than it was a year ago. The economy is now shrinking at a 7 percent annual pace; the budget deficit has swelled to the widest in at least two decades; the country\u2019s investment-grade rating is gone; Congress is bogged down in\u00a0impeachment proceedings\u00a0against President Dilma Rousseff; and the greatest corruption scandal the country has ever known is showing little sign of abating. If Levy couldn\u2019t stem the crisis when it was more manageable before, what reason is there to believe Barbosa will now?<\/div>\n

Levy struggled almost from the outset, though, to reverse the widening budget gap. With legislators focused on the corruption scandal — which began at state-run oil giant Petrobras and has landed many executives and politicians in jail — little attention was paid to his pleas to cut spending. His relentless push in Congress to curtail labor and pension benefits earned him scorn from many members of the ruling Workers\u2019 Party, which traditionally championed a robust social safety net.<\/p>\n

Even some business leaders started to express concern that Levy\u2019s struggles to shore up fiscal accounts were blinding him to the need to stimulate growth. As the country\u2019s finances worsened and the economy slipped deeper into recession, markets sank month after month. The currency is down 33 percent against the dollar this year. Prices on the government\u2019s 10-year bonds have dropped to 82 cents on the dollar from 99 cents when Levy took office back in January. The yield has climbed to almost 7 percent.<\/p>\n

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\"Brazil<\/div>
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Brazil hasn\u2019t posted a primary budget surplus since April<\/div>\n<\/figcaption><\/figure>\n

The task of negotiating with Congress now falls to Barbosa, a 46-year-old economist who studied at the New School for Social Research in New York and started his career as a civil servant at the central bank in the mid-1990s.<\/p>\n

The strength of the minister\u2019s ties may get tested quickly. \u00a0Barbosa has said he\u2019d try to push through plans to simplify taxes and cap pension spending. He said in an interview with Estadao newspaper over the weekend he would win approval by May of a tax on banking transactions. Those are proposals that Levy never managed to get Congress to back.<\/p>\n

\"Corruption<\/a><\/div>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

Raymond Colitt and Anne Edgerton write: \u00a0Nelson Barbosa could, of course, turn out to be the man who fixes Brazil\u2019s finances, tames soaring inflation and revives the sinking economy, but investors sure aren\u2019t betting on it. He replaces Levy, the … Continue reading →<\/span><\/a><\/p>\n","protected":false},"author":22,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"footnotes":""},"categories":[13],"tags":[],"class_list":["post-31771","post","type-post","status-publish","format-standard","hentry","category-finance"],"aioseo_notices":[],"aioseo_head":"\n\t\t\n\t\n\t\n\t\n\t\n\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t