When I speak of a Third Way, I am speaking of Tony Blair... which is a center-right solution...it means accepting the essential of liberal logic [in the European, free market, sense of the term] and adding some social measures... I believe that countries like Brazil and Mexico need a government of the center-left and not the center-right. A center-left solution does not mean revolution, but the use of measures which will help popular strata which are subjected to a condition of great inequality in the program of the government.
Q: Where is FHC situated? He is in the midst of a storm. He is not in the center, nor on the right, nor on the left, he is in decline. His country is experiencing a great crisis... in politics as in everything there are four dimensions: right, left, advance and decline. To reverse this situation, he must confront the real problems of the country and not just the problems of the market.
Q: Is it possible FHC will survive the current financial crisis with his coalition intact? I think so, because there is not a true right in Brazil. Even the oligarchy is not a true oligarchy, but people who generated their fortunes by means of the State. Nevertheless, I think that FHC's coalition with the right impedes him from doing a a series of things, taking into account that the political system in Brazil is a great mixture of everything.
The current situation is one of national danger which not even the President can resist. He tried to resist, said he would resist, but he could not do so. It is important to say that the crisis is not the responsibility of the President, but of the political system. This is to say that the responsibility is of Congress and of the States.
I believe that the rationale for raising interest rates to control the outflow of dollars is based on a short term policy. One cannot guarantee that the economy will function with interest rates of 40%. In my opinion, it is necessary to give priority to the economy over the financial sectors. This means lowering interest rates to allow the businesses to survive.
Another factor which I believe is essential to get out of the crisis is to increase the decision-making capacity of the government, increasing the power of the President of the Republic. I believe that the government's priority should be to help the entrepreneurs and the least favored popular categories of the population. In a country like Brazil, there is a moment in which the government's capacity for economic action depends on its social support. And the social support depends on the struggle against inequality. If FHC remained so popular, it is because he managed to improve the quality of life of the people and now this is threatened - a threat which is, in truth, psychological, which FHC can overcome by giving the population the feeling that the government is strong and capable of taking measures. Thus, I argue that the government should take risks; on one side, lowering the interest rates, and on the other side, taking visible and spectacular measures to encourage the population which reelected him.
Q: What might these measures be? For example, at the moment, the economic importance of the redistribution of land in Brazil is limited. But the social and symbolic importance is great. National integration, which is essential, can be advanced by redistributing land. This gesture is more symbolic than economic but it show the willingness of the President to respond to the demands of the country. If the country feels defended, it will function.
Q: Are you optimistic about reaching a solution to the current crisis? I would say that the current moment depends most of all on the Brazilians. They should give the government the capability for greater intervention. I do not find any social forces in Brazil which have an interest in the return of inflation. It is necessary that Brazilians be alert and that the political system permits the government to be active rather than passive. One cannot forget that Brazil is a modern country, in which the fundamental weaknesses are social rather than economic.
These excerpts translated by Ted Goertzel.