The Country'S Olympic Economy Is In A Mess.

Local time April 17th, the Brazil federal house of Representatives voted to impeach President Dilma Roueff (Dilma Rousseff), and the Senate will continue to consider impeachment in early May.

Many people believe that roseff's resignation is a matter of no doubt.

In rosef's term, Brazil's state oil has caused an astonishing corruption scandal, but the real slash of Brazil's economy has been slug down.

As the world's seventh largest Latin American economy, Brazil, once the BRICs' golden boy and the soon to open Olympic Games, is facing the worst recession since 1930s.

According to the Wall Street journal, Brazil's GDP growth has almost stagnated in 2014, and GDP has shrunk by 3.8% in 2015, and the further contraction in 2016 is still inevitable.

In just a few months, the top three international rating agencies, S & P, Fitch and Moodie, have reduced Brazil's sovereign credit rating to junk level, partly because they predict that Brazil's public debt will exceed 80% of GDP.

In January 2016, Bloomberg quoted Goldman Sachs economist Alberto Ramos (Alberto Ramos) as saying, "No. 10 was originally used to describe Bailey.

Now the number 10 is about Brazil's inflation rate, unemployment rate and presidential support rate.

Perhaps the world's only Latin American country, Venezuela, has a worse growth forecast for GDP than Brazil.

Many Brazilians are desperate to get rid of Rousseff. They feel that this government should be responsible for the collapse of their economic performance.

What is interesting is that in China, where the wind and horses are not identical, some people confuse the public and blame Brazil's poor economic performance on democracy.

They claim that democracy has done harm to Brazil, claiming that democracy has left Brazil with immediate interests but can not solve economic problems. To clarify these misunderstandings, let us first recall how Brazil has come to this stage.

Like most Latin American countries,

In 2002, he elected a left-wing president whose name was Lula (Lula).

Lula has been in good luck ever since he came to power in January 2003.

Former president Cardoso (Cardoso) has laid a good economic foundation. Lula simply retained most of the pro market macroeconomic policies of his predecessor.

At the same time, the global commodity market began to flourish, and Brazil's exports to China set a record for commodities. Brazil has also tasted the sweetness of high oil prices.

In 2007, Brazil harvested windfalls - they discovered a large deep-sea oil field in the surrounding waters. President Lula called the oil gift the Brazilian passport to heaven.

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In the 2004-2010 year, Brazil's GDP grew by an average of 4.4%.

The unemployment rate in Brazil dropped from 12.3% in 2003 to 5.9% in 2011.

The global financial crisis of 2008 is like sneezing to Brazil.

In 2011, Lula, who helped 50 million Brazilians out of poverty, ended his term with a support rate of up to 83%. Lula's successor and his disciple, Rousseff, a member of the Brazil Labour Party, once stood for 92%.

Unfortunately, after 2011, the good days in Brazil are over.

This round of global commodity prices plummeted, Brazil oil, iron ore and soybeans and other commodity price index fell 41%, Brazil exports is indeed a big blow - once Brazil's economic promoter, is now dragging Brazil's hind legs.

However, the Center for Economic and Policy Research points out that Brazil's exports are about 11% of GDP's contribution, and how bad it will not hit Brazil's economy.

Brazil's economic setback is mainly due to the fact that the left wing Labour Party has been in power for 13 years, not only ignoring Brazil's historical legacy, but also creating many downright disasters.

Although Brazil embraced the marketization in 1990s, such marketization was a half baked market.

The government of Brazil has two major state-owned entities, the Brazil Valley company (Vale) and the Brazil oil company (Petrobras), which are engaged in the mining industry. Even if they are independent and publicly traded, the Brazil government has the majority of the shares directly or indirectly.

This unfinished privatization led to the oligopoly of Brazil enterprises and the fact that Brazil's economy did not have enough capacity to participate in global competition in twenty-first Century, let alone state-owned enterprises often breed corruption.

On the other hand, the Brazil government handed over the contract for exploitation of salt oil to Petrosal, a subordinate company of Brazil Petroleum Company (Brazil), and relentlessly regarded Brazil oil company as the rocking Qian Shu of the government, that is, let Brazil oil company subsidized the social welfare items of the government.

In early 2014, the Brazil Congress assigned 75% of the oil production royalty to education and 25% to health care.

Brazil energy consultant Adriano Pires (Adriano Pires) also said, "Brazil petroleum has become a short-term economic policy tool, it is used to protect domestic enterprises from competition, and is also used to maintain inflation."

Diplomacy

(Foreign Policy) pointed out that the proportion of Brazil's government expenditure to GDP has expanded from 18.6% in 2000 to 20.2% in 2014, compared with 12.2% in Mexico in 2014.

Much of Brazil's huge government spending has been spent on social welfare programs and public pensions.

More than 50 million Brazilians benefited from the Bolsa Fam LIA, a social welfare project launched by Lula. The aim of the project is to enable children from poor families to learn and see diseases.

The pensions paid by the government of Brazil are even more than 12% of the GDP, which is much less than Brazil, which is much richer and the population is much older. Maybe only the Greek economy falls to the bottom, and the proportion will be above Brazil.

When the economy is in good condition, there is nothing wrong with it.

Once the economic situation is going down sharply, these are all cumbersome.

As the American Enterprise Institute said, Brazil implemented the family allowance scheme for 12 years, and only 12% of the beneficiaries could step into the middle class.

When rosaff came to power in 2011, instead of taking measures to restrict, he intensified his efforts to expand the expenditure on social welfare projects (such as raising the pension standard).

Lula created 1 million 460 thousand jobs each year, but most of them were unstable, meager and unskilled posts. Rosaff came to power, and this number dropped to 829 thousand (152 thousand in 2014).

The result of a series of failures is that the deficit of the Brazil government has surged from 2% in 2010 to 10% in 2015.

Problems accumulated in Brazil's generation and poor infrastructure.

The expensive venues of the 2014 World Cup and the 2016 Olympic Games attracted the attention of the whole world, but Brazil spent only 1.5% of GDP per year on infrastructure construction, with the global average of 3.8%.

The economist cited an example of a farmer in Mato Grosso, Brazil, who sent soybeans to port at 25% of the value of goods, and only 9% in Iowa.

Compared with other Latin American countries, Brazil's Pink Tide has not been so fierce, but there are enough lessons.

Luckily, Brazilians enjoy the most simple and just right, "do not do well, do substitutions."

In 2008 and 2010, University of Pittsburgh, Barry Ames (Barry Ames) and others showed that in 2002, Brazil Labor Party leader Lula was elected the first left-wing leader in Brazil. Not Brazil voters had a special preference for the left wing policy, but they were conducting a "retrospective vote" (Retrospective voting). They voted for Lula, the Labour Party, who expressed disappointment at the Cardoso administration, which failed to do their job well last time. This phenomenon occurred in democratic countries.

In fact, in 1994, Cardoso was also the beneficiary of the "retrospective vote".

If it were not the key votes of low income voters, Rousseff could not defeat his opponent in a very weak way in 2014, and became president again.

Today, Brazilians have finally lost patience with extravagant and scandalous Rousseff. Without accident, the Brazilian government will be able to usher in a new government as early as next month.

According to the procedure, once Rousseff is suspended or permanently removed, vice president Michel Temel of Brazil Democratic Movement Party (Michel Temer) will be temporarily replaced by the presidency.

According to Bloomberg and "

In the times, if he comes to power, he intends to reduce government personnel, reduce government spending, reduce government debt, reduce the size of state-owned enterprises and replace most cabinet members and state-owned enterprises.

However, vice president Temel's support rate is not very good. The survey by Datafolha, a Brazil polling company, shows that 60% of Brazilians want the president and vice president to resign.

Some Brazilians have never even heard of the name of the mill.

It is also unknown whether Temel will be impeached like rosaff.

The only certainty is that democracy has taken root and Brazil is unlikely to return to the dark days of 1964-1985 years of military dictatorship.

The Wall Street journal interviewed a 65 year old Brazil taxi driver. "First, Dilma (Luo Saifu) has to step down."

Then we have to see what can be done. "If he can't provide (what we want), we will return to the street to protest."

And a construction contractor interviewed by the media said, "the president is leaving, the country is saved". "Welcome to Brazil in the summer, everything will be better."

After all, a democratic country that can take the city of God and the elite force, what can not be changed?