The billionaire loss that the Brazilian stock market had last Thursday and the sharp rise in future interest rates were a reaction to “Lula’s irresponsible and populist speech”, said Maílson da Nóbrega, a former finance minister, in an interview with CNN this year. Saturday (12).
President-elect Luiz Inácio Lula da Silva displeased financial agents by questioning fiscal control policies and suggesting that capital directed to education are investments, not expenditures.
“To say that education is not an expense, it is an investment, is stupid, because an expense is an expense. The label of an expense does not change its nature. The concern that a public administrator should have in matters of public finances is to make social programs impact the public debt in a controlled way,” she says.
Maílson explains that the debt-to-GDP ratio is the indicator most observed by investors, because it reflects the solvency of the public sector. “Spending on education impacts the Treasury just like any other. If it does not have the fiscal resources for this, the government will have to get into debt, and the debt is sustained for a while. There will come a time when the perception will be that the expansion of the debt has taken such an unsustainable trajectory that, at some point, the government will be unable to pay the financial burden of the debt”.
The former minister emphasizes the importance of social programs aimed at the poorest, especially in the area of education, but warns of the need for plans to be accompanied with fiscal responsibility.
“Everyone is in favor of social policies aimed at the underprivileged, it is necessary to provide them with conditions that are not just for survival, but for access to education, good housing, transportation and so on. Now, if you do this without paying attention to the impact on the debt, it goes against the poor, because the lack of fiscal control generates a drop in confidence, which implies the flight of capital from the country, and impacts not only prices, but the exchange rate, that has an influence on prices traded abroad, particularly commodities”.
See the full interview in the video above.
*Posted by Ligia Tuon
Source: CNN Brasil
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