Germán G. Creamer: Lula: Brazil and China Co. | Columnists | Opinion

Luiz Inácio Lula da Silva’s fight is only just beginning when he was narrowly elected president of Brazil. International investors are confident that this small electoral advantage, as well as an opposition-controlled congress, will limit his leftist drift. An important point in Lula’s favor is his offer to protect the Amazon and counter Bolsonaro’s extractive policies in this region, and the possibility of creating an international group that includes Brazil, Indonesia and the Congo before the United Nations meeting. on climate change in November.

Elections in Brazil: This is how Luiz Inácio Lula da Silva won the presidency over Jair Bolsonaro in the ballot

The stock market, measured by the Bovespa stock market index, and the Brazilian real have reacted positively after a small drop after the elections. The same happened with the share price of the oil company Petrobras due to the fear that its direction will change. This positive performance of the Brazilian economy is explained by the proper management of the inflationary crisis by the Central Bank of Brazil. However, there is doubt as to whether Lula will accept the independence of the Central Bank as he did in his two previous terms, considering that he has declared that the issuing body must also set goals for employment and economic growth.

Lula proved to be a pragmatic leader who took advantage of the income generated by the commodity boom…

Although in recent years his name has been overshadowed by corruption scandals during his last government and by the expansionist and interventionist fiscal policy of his successor, Dilma Rousseff, during his first two presidential terms Lula proved to be a pragmatic leader who took advantage of the generated by the boom in primary goods to prepay IMF debt and support social and infrastructure programs that helped lift 25 million people out of poverty. These results mark a notable difference with Latin American leftist leaders like Chávez, who during the same period squandered the income generated by the oil boom, significantly deteriorating the Venezuelan economy and society. While Lula is expected to reestablish the Council for Economic and Social Development and select a cabinet with old and new allies in order to execute some of his campaign offers in the social field and influence congress, a determining factor is the relationship with China. . In 2020, a third of Brazilian exports went to China, while only 10% went to the US. For this reason, the slowdown in the Chinese economy represents a major challenge for Lula. However, Chinese investment in Brazil will more than triple in 2021, reaching almost six billion dollars, thus increasing the Sino-Brazilian relationship.

Thousands of Bolsonaro supporters call for a military intervention in Brazil because they refuse to accept Lula

Lula can try to revitalize the diplomatic relationship with China as he did in his second term that led to the formation of the powerful group of emerging BRIC countries. However, the questions that may affect the rest of Latin America are what is its tolerance for the increasingly authoritarian government of Xi Jinping, and the balance between its environmental and social offers, and Chinese food and industrial demands that have led to agricultural expansion and mining in the Amazon. (EITHER)

Germán G. Creamer: Lula: Brazil and China Co. | Columnists | Opinion