Opinion – Arminio Fraga: Interview with Lula by telepathy

In order to collaborate with the debates in this 2nd round, below is the “transcription” of a conversation I imagined I had with Lula. On my side, I confess the influence of a hint of hope, but I believe he was sincere in everything he said.

Lula, you have been pressured to give more details about what you intend to do with the economy if you are elected. Where do we start?

My main concern will be the same as always: the living conditions of the Brazilian people, especially the poorest. It is absurd for an agricultural power not to be able to adequately feed the population. You’re an economist, wouldn’t this situation be a market failure?

I’m thinking, there’s a lot involved.

Apparently it’s the economists’ fault… Look, while you’re thinking, let me explain something to you: that’s what they invented the government for. Let’s include in the budget a space to deal with this topic.

When we invented Bolsa Família, we followed the liberal recommendation to transfer money to the poor and let them decide where to spend it. It worked well, but I want to see how things are going. We have a lot to do in this area.

In recent times, inflation accumulated in 12 months has been hitting double digits. What do you intend to do about it?

Look, to begin with, I do not accept that my commitment to fighting inflation is doubted – no one understands better than me that the poor are the ones who lose the most with inflation.

In my first term, I gave the Central Bank all the freedom to take care of the matter. There was a lot of friendly fire over BC, but I played it.

I intend to keep the current president, of course, as required by law. I’m told he’s been working well, even better.

And tax policy?

This is a challenge that we will have to face. I concluded that the inheritance I received in 2003 was not so damned. It had a primary surplus of more than 3% and a debt that was not that high and it shrank after the dollar fell, thanks to the good work we did.

Now there’s a lot of deferred and dammed spending and a projected deficit for next year. The debt will rise again. During my term I will adjust the tax to stop the debt from growing.

As?

Just a moment I have to answer a phone call. Padilha, I’m tired of this mystery, I’m going to open the game with the class. You can publish.

Look, there’s a lot of fat out there, a lot of allowance, a lot of fat cat. You know that even in the public sector there is a lot of abuse and inequality. My idea is to attack the problem on all fronts and use the result to spend on social and settle accounts. I’ll get someone at Palocci’s level to coordinate this work.

But will there be money left for the social?

I’ll explain something to you: who will benefit the most from the adjustment, again, will be the poor. Because? In the mess of inflation and fiscal mess, who gets screwed? The usual, the poorest.

This point is important: I will face this challenge for the poor. If Faria Lima likes it, so much the better, but my motivation is much deeper.

And the cost cap? Will there be a lot out?

I know that neither spending nor public debt can continue to grow more than GDP. I was suggested to remove investment from the account, but what is investment? For me, it has to include education, health, safety, science. Better not make it up, our credibility is low. And almost all infrastructure investment can be done with private capital. With our supervision, of course.

And will the economy move?

Well, I was waiting for this question. I believe that a peaceful, more peaceful country that does not repeat the mistakes of the past, including the PT, has everything to grow by 4% a year for a long time, starting right after the elections. If I win, of course.

I believe that, but I’m one of the few. How would it be? Just tranquility is enough?

Not enough. It helps a lot but it’s not enough. I think practically everything in Brazil has room for improvement. There are some reforms in the face of the goal, waiting for a push from the president. I will personally lead this work.

Here I list some examples. First the tax; both the creation of a VAT and an income tax cleaning, full of undue softness for the richest. State reform also makes perfect sense. My foundations are up for a fair and well-designed makeover, not to be abused. They know that I can come across them.

What else?

I’m going to make a huge bet on green Brazil. It seems like a perfect path for us, who always care about the environment. End deforestation, save our biodiversity, settle things with Europe, join the OECD. And clean air, rivers and beaches for all. Ever wonder?

To finish: and these ideas of the naval industry, public banks, etc. It’s kind of old…

Keep calm. We’ll treat people’s money well. I promise that everything we do will be studied, justified and evaluated in a transparent way.