President Luiz Inácio Lula da Silva once again criticized the level of the Selic rate, the economy’s basic interest rate, defined by the Monetary Policy Committee of the Central Bank (BC). Last week, the Copom maintained the rate at 13.75% per annum. For the president, there is no justification for the Selic to be at this level at the moment.
“All you have to do is see the letter from the Copom for us to know that this increase in interest rates and the explanation they gave to Brazilian society is a shame”, he said today (6), during the inauguration of Aloizio Mercadante as president of the National Development Bank Economic and Social (BNDES).
“How am I going to ask Joshua [Gomes, presidente da Federação das Indústrias do Estado de São Paulo – Fiesp] make businessmen linked to Fiesp invest if they cannot borrow money”, said Lula.
For the president, the issue is not limited to the fact that the Central Bank is independent. “Now it’s solved everything. The Central Bank is independent and will no longer have interest rates. Big mistake. The problem is not with an independent or government-linked bank. The problem is that this country has a culture of living with high interest rates, which does not match our need for growth.”
In the president’s view, Brazilian society cannot accept a level like this, and the business class needs to learn to complain about high interest rates. “They [empresários] do not speak. In my time, 10% was a lot, today [o percentual de] 13.5% is not enough. If the business class doesn’t speak up, if people think you’re happy with 13.5%, honestly, they [integrantes do Copom] they will not lower interest rates. We need to be aware. It’s not Lula who has to fight, no. It is Brazilian society that has to fight,” he said.
Lula said that he hears from many people that the President of the Republic cannot criticize the high level of interest rates. “If I, who was elected, cannot speak, who will I want to speak? The recyclable material collector. No. I have to speak because, when I was president, I was charged”, he added.
“The Brazilian economy needs to grow again. Is it urgent. There are only two ways for it to grow back. Or the private sector invests and it will only invest if there is demand. Or the State encourages private initiative to do it, putting its hands in the dough first. This is the role of our government, to put our hands in the dough for the economy to grow again.”
Growth inducing bank
Still during Mercadante’s inauguration, the president defended that the BNDES must once again be an inducer of the economy. “This country has to be rebuilt, and we cannot take too long, we cannot wait too long. That’s why I think the BNDES urgently needs it, comrade Aloizio, I hope that your intelligence and your competence, everything you’ve done in life, that you make this bank go back to being a bank that induces the development and economic growth of this country ”, he said when addressing the new president of the BNDES, adding that Banco do Brasil, Caixa, Banco do Nordeste (BNB) and Banco da Amazônia (Basa) were created precisely with the function of offering financing for state projects and municipalities.
BNDES President, Aloizio Mercadante, and the President of the Republic, Luiz Inácio Lula da Silva, during the inauguration of the new president of the bank in Rio de Janeiro – Tomaz Silva/Agência Brasil
“Aloizio, I’m putting a lot of faith in your management at the BNDES, you have no idea of the faith I’m having in you, so I also want to warn you of the responsibility you have. You only have one mission here, Aloizio, and that is to make this bank once again a source of pride for the Brazilian people. It is to make this bank open again for businessmen who want to invest in new things, in new undertakings”, he commented, adding that the country cannot continue to be paralyzed as it is currently.
Lula also defended BNDES investments in infrastructure works – currently almost 14,000 are at a standstill. According to Lula, in the economic crisis of 2008 it was the BNDES that saved Brazil. “If it weren’t for the BNDES, this country would have sunk and it didn’t go down exactly because of the BNDES, which made money available to undertake in this country. That’s why we were the last to enter the crisis and the first to leave the crisis, ”he pointed out.
Minimum wage
The president also criticized the lack of real correction of the minimum wage. “The minimum wage has not increased for seven years. My question is: how can we talk about stability, predictability, credibility, if we don’t even fulfill our duty to readjust the minimum wage every year, not just according to inflation, but according to economic growth, when it grow to share with the people?”, he asked.
Lula also refuted what he called lies related to the performance of the BNDES during his mandates. He ruled out that his government had benefited “half a dozen companies with financing”. On the contrary, according to him, there was a lot of support for micro, small and medium-sized companies. As for the debts of Cuba and Venezuela, which were not paid, Lula credited the previous government, which, as he stated, did not maintain diplomatic relations with those governments.
“Let’s be frank. The countries that didn’t pay, be it Cuba or Venezuela, it’s because the president decided to cut off international relations with those countries so as not to charge and keep accusing us. In our government, these countries will pay because they are all friends of Brazil and will certainly pay the debt they owe.”
