The Green Giant

The Green Giant

“Without change there is no innovation, creativity, or incentive for improvement. Those who initiate change will have a better opportunity to manage the change that is inevitable.”

William Pollard

By: Erreh Svaia

Lula Da Silva, Brazil´s ex-president confirmed years ago that saying that goes “a loudmouth falls faster than a cripple”, jealous after Mexico's so called “Mexican Moment” (that really never landed well) was overshadowing the so called “Brazilian Miracle”, he claimed that was Mexico was really doing was exactly what Brazil did decades ago, in a past comment of mine in this blog, I claimed that Lula was historically inaccurate, as what was happening exactly was that was Brazil was doing was what Mexico did decades ago, and it really shows, as Brazil is going thru a crisis that amazingly resembles the crisis of the 70s in Mexico, Lula anchored Brazil success in recent oil reserves findings, raw materials, protectionist policies and big social investment, In a way Lula succeeded in taking low classes out of extreme poverty, but he failed in creating solid conditions for the middle class to grow (high quality education, high quality hospitals and well paid employment) commodities prices soared high as well as public spent, but after oil and commodities prices begin to fall as consequence of China slower growth, deficiencies in Lula's and Dilma Rousseff (Lula's successor) economic direction started coming to the surface, revealing that not everything was fine within the green giant structure, Brazil growth was stunned, as the economy based on others growth (China and Russia mainly) proved to be inefficient and unsustainable for long time.

These days Brazil is still trying to find out what went wrong, and as Dilma's popularity sank, commodities prices keep falling and corruption scandals arise within Brazil's main government energy industry Petrobras.

But not everything is wrecked in Brazil's economy, as the previously severed ties to North America are beginning to blossom once again, protectionist policies are starting to disappear and Brazil is finally starting to open to the world and at the same time building truly strong foundations in order to become a part once again if a dynamic and volatile global scenario.

The lesson is more than clear this days, and it should serve as an example to countries in America and all over the world, an economy based in oil is fragile and with a short span of life, protectionist policies are efficient in short time but ultimately end up isolating the country and leaving it without options to sustained growth, reminding us that in order to achieve long term success, an economy should take a long, hard, but tried and true direction towards innovation, technology and education in order to build a strong, leading and adaptable economy that can survive today's hyper connected and hyper volatile conditions.

America needs a change of direction, more openness towards global economy and less ideological isolation, while in the past Brazil aligned with countries like Venezuela and Argentina, building a block to isolate South America from North America, it’s now evident that such policies stunned its growth, but just as Lula, Brazil is a pragmatic agent and is re thinking its direction and its sure that the green giant will mend its course and regain its place as leader in the region.