O que é este blog?

Este blog trata basicamente de ideias, se possível inteligentes, para pessoas inteligentes. Ele também se ocupa de ideias aplicadas à política, em especial à política econômica. Ele constitui uma tentativa de manter um pensamento crítico e independente sobre livros, sobre questões culturais em geral, focando numa discussão bem informada sobre temas de relações internacionais e de política externa do Brasil. Para meus livros e ensaios ver o website: www.pralmeida.org. Para a maior parte de meus textos, ver minha página na plataforma Academia.edu, link: https://itamaraty.academia.edu/PauloRobertodeAlmeida.

quinta-feira, 7 de abril de 2016

Panama Papers: quando a hipocrisia se encontra com a roubalheira - NYTimes

Como já disse em outra postagem, muitas pessoas honestas, que ganharam muito dinheiro com seu esforço e dedicação a uma atividade qualquer, querem apenas proteger seus ganhos de governos extratores, gananciosos, e basicamente corruptos.
Outros, ricos por natureza, se ouso dizer, também querem se subtrair ao Fisco de países geralmente corretos, mas um pouco exagerado nas medidas de "pikettysmo explícito".
Isso não se aplica, obviamente, aos bandidos deliberados (e eles são muitos), e aos políticos safados, que dizem uma coisa em público e praticam outra em privado.
Todos eles, INVARIAVELMENTE, vão negar que possuem essas contas.
Parece que o islandês que se demitiu vai ser o único a ser "honesto", ou arrependido sincero.
Paulo Roberto de Almeida

http://www.nytimes.com/2016/04/07/world/americas/panama-papers-leak-casts-light-on-a-law-firm-founded-on-secrecy.html?emc=edit_th_20160407&nl=todaysheadlines&nlid=13125452&_r=0

Panama Papers Leak Casts Light on a Law Firm Founded on Secrecy


Video

Panama Lawyer Seeks Source of Leak

Ramón Fonseca, a co-founder of Mossack Fonseca, said his firm had asked the Panamanian authorities to investigative the hacking of its computers.
By REUTERS on Publish Date April 6, 2016. Photo by Carlos Jasso/Reuters. Watch in Times Video »
MEXICO CITY — The two men came together in an era of political and economic uncertainty in Panama: One a reserved German immigrant whose father served in the armed wing of the Nazi party, the other a gregarious, aspiring novelist whose family opposed Panama’s military dictatorship.
With the nation still under the sway of Gen. Manuel Noriega, the pair merged their small law firms in 1986, creating what would become a powerhouse of secretive offshore banking for the elite. Over the next three decades, Jürgen Mossack and Ramón Fonseca expanded their practice to a staff of 500, with affiliate companies around the world and a client list of the powerful, the famous and, sometimes, the infamous.
In January, a prosecutor investigating the sweeping corruption in Brazil publicly called their law firm “a huge money launderer.”
The partners had become very wealthy, and Mr. Fonseca leveraged the firm’s success to gain an influential role in the upper ranks of politics. He told associates that he wanted to clean up the government, serving as a special adviser to President Juan Carlos Varela until the corruption scandal in Brazil forced Mr. Fonseca to resign this year.
In an interview, he said that entering politics was, in part, a way of giving back. “I believe in sharing the pizza,” he wrote. “At least to give others one slice.”
The firm, Mossack Fonseca, was built on assurances of bulletproof privacy for its clients. But its operations were laid bare this week by a vast leak of millions of documents that have helped expose the proliferation of shell companies and tax havens for the world’s wealthiest people. The revelations have already prompted Iceland’s prime minister to step aside and spurred criminal investigations on at least two continents.
The leak has also brought more scrutiny to Panama’s financial and legal sectors, just as the country’s leadership was trying to shed its longstanding reputation as a haven for the loot of the criminal and corrupt. In February, Panama was removed from a watch list maintained by an international agency that sets standards to combat money laundering and terrorism financing, but it remains under scrutiny as a haven for tax evaders.
Panama’s president has vowed to cooperate with any judicial investigations stemming from the leaked information, which could put him in the awkward position of allowing an inquiry into his former adviser.
Mossack Fonseca has denied that it committed any wrongdoing, and Mr. Fonseca proclaimed his firm’s innocence.
“At the end of this storm the sky will be blue again and people will find that the only crime is the hacking” of the firm’s documents, he said in an hourlong interview conducted over the messaging platform WhatsApp.
But some in Panama who know Mr. Fonseca say the leak’s contents are at odds with how he has tried to portray himself and his role in the country.
Carlos Guevara Mann, a fellow party member and former government official, said he had once asked Mr. Fonseca, already a successful novelist, why he would bother with politics. The lawyer, he recalled, told him that he wanted to set straight the nation’s human rights record.
“When you match that conversation with the fact that the firm was providing services to all of those notorious human rights violators — Qaddafi, Mugabe, Assad and Putin — it really is repugnant,” Mr. Mann said.
Among the leaked documents was an email exchange obtained by the International Consortium of Investigative Journalists, in which the firm’s top partners realized they had worked for years with clients from Iran who had been listed on a sanctions list published by the United States government and the United Nations.
“This is dangerous!” Mr. Mossack wrote in an email to Mr. Fonseca and others at the firm. “A red flag should have been raised immediately.”
Photo
Panama City on Monday. The president of Panama has vowed to cooperate with investigations over a law firm’s leaked documents. Credit Arnulfo Franco/Associated Press
Mr. Mossack placed blame for the oversight on employees in the law firm’s London office who were “not doing their due diligence thoroughly, (or maybe none at all).”
The leaks have roiled Panama’s legal and banking sectors, bedrocks of the country’s economy, and chilled Panama’s business class. The country’s bar association has come to the firm’s defense, saying the leak amounted to an attack on the country’s reputation.
“Terrible damage is being done to them, to all lawyers and their country at large,” José Alberto Alvarez, the association’s president, said in a news conference on Monday.
Continue reading the main story
There is a lot at stake for Panama, a country whose economy heavily relies on the legal and financial services industries.
The rise of Mossack Fonseca coincided with the emergence of Panama as a capital of the worldwide offshore banking industry. The increasing flow of global capital across borders during the 1970s and 1980s fueled a market for lawyers and accountants capable of sheltering the money, and Panama was primed to take advantage of the boom.
Beginning in the early 1900s, its station as a trade and shipping center — at the intersection of two continents and at the convergence of the Pacific Ocean and the Caribbean Sea — made it an obvious candidate for offshore accounting. International ships flew the Panamanian flag to take advantage of its advantageous corporate tax structure, which some experts say was copied almost directly from the state of Delaware.
“Because it has always been at the center of international trade, it was a natural fit for things like offshore finance and international offshore tax planning,” said Victor Fleischer, a professor at the University of San Diego School of Law. “I don’t know if it is justified or not, but people have always thought of Panama as a little bit shady.”
The firm was aggressive and nimble, capable of responding to an evolving regulatory landscape. Its reputation flourished.
But other Panamanian law firms joined the fray, too, including larger and more prominent practices than Mossack Fonseca.
“All the important Panamanian law firms have a division like this,” said Roberto Eisenmann, the founder of the newspaper La Prensa in Panama.
In fact, Mossack Fonseca is just one of countless firms around the globe dedicated to a worldwide industry that harbors trillions of dollars and may deprive nations of as much as $200 billion in tax revenues each year, tax and legal experts say.
Mossack Fonseca’s founding partners bought large homes in exclusive neighborhoods in Panama City as well as luxurious weekend retreats. Growing up, their children borrowed the company plane and took friends on trips.

Distinct Personalities

But despite their parallel ascents in business and society, Mr. Mossack and Mr. Fonseca apparently kept their social lives separate. Friends and associates describe their personalities as completely distinct.
Mr. Mossack was born in Germany in 1948, and during World War II, his father was a member of the Waffen-SS, according to United States Army intelligence files obtained and provided by the International Consortium of Investigative Journalism. The family moved to Panama in the 1960s where, according to the intelligence files, Mr. Mossack’s father offered to spy for the C.I.A.
Mr. Mossack has maintained a low profile, eschewing the party scene of Panama’s high society while adopting a disciplined approach to his work. Though he is more focused on the day-to-day operations, he has so far declined to comment publicly about the document leak.
Mr. Fonseca, by contrast, has for years been something of a man about town. Born in Panama in 1952, he studied at the London School of Economics and later worked for several years at the United Nations in Geneva — “trying to save the world,” as he described it in the interview.
Video

France to Blacklist Panama

In response to the “Panama Papers,” French finance minister Michel Sapin told his country's parliament that France will put Panama back on its blacklist of tax havens.
By REUTERS on Publish Date April 6, 2016. Photo by Patrick Kovarik/Agence France-Presse — Getty Images. Watch in Times Video »
It was then, he said, that he first began to ponder writing a novel. Decades later, in the 1990s, he became famous as a novelist, twice winning Panama’s highest literary prize.
But he had even greater ambitions: politics. One day, when complaining to his father about the shabby state of Panamanian politics, the elder man snapped at him. “My father told me: It’s not fair to criticize the bull fighter from your seat,” he wrote in the interview. “Enter the ring!”
By the 2000s, he was well ensconced with the Panameñista party and became a close adviser to Mr. Varela. After Mr. Varela became president in 2014, Mr. Fonseca joined his cabinet as an adviser.
Within Mossack Fonseca, both founding partners had swagger. Former employees said the firm had a staff of aides, whose job it was to arrange hotel, car service and entertainment for wealthy clients when they came to town — like tours of the old city or the Panama Canal.
“There were no kings or princes that I remember,” said Tarina Rodríguez, adding that she worked at the firm for three years and served as the “head of hospitality.” The visitors, she said, “were very low-key businessmen, who wanted to keep a low profile.”
Several former employees described a disciplined culture, arguing that the partners appeared to run an ethical business. Mr. Mossack and Mr. Fonseca, they said, were sticklers for compliance, insisting on detailed procedures concerning most business matters at the firm.
“There were so many processes you had to follow,” said Mileidy Castillo, who said she worked at the firm from 2011 to 2013.
Experts say, however, that checking boxes is not the full measure of compliance. Rather, it comes with a law firm’s willingness to push its clients to reveal the true identity of those involved in offshore transactions, and the source of their money.
“Too often, these offshore firms are willing to take on just about any customer and follow their instructions,” said Jack Blum, a former Senate investigator who now specializes in examining money laundering and tax evasion.
As offshore accounts have multiplied during the past several decades, they have increasingly been used to launder money, evade taxes or finance terrorism. Those seeking to break the law have often enjoyed the same secrecy as accounts used for legitimate purposes.
An international transparency movement developed over the past decade, spearheaded by major international agencies. But Panama, long accustomed to following its own path, was far behind in compliance.
“In the last 25 years or so, there has probably been 15 years of almost no regulation,” Mr. Eisenmann said of Panama.
In 2014, the Financial Action Task Force put Panama on its list of countries where transparency and accountability systems were woefully lacking, a major blow to the nation. Mr. Varela quickly pushed through legislation to address the issue, leading to Panama’s removal from the list in February.

The Last Big Holdout

But Panama has been more reluctant to follow a transparency initiative started in 2009 by the Organization for Economic Cooperation and Development. While most other international financial centers, like the British Virgin Islands, the Cayman Islands and Singapore, quickly agreed to the initiative, Panama held back.
“Panama is the last major holdout that continues to allow funds to be hidden offshore from tax and law enforcement authorities,” the group’s secretary general, Angel Gurría, said in a statement on Monday.
But several tax experts pointed out that Panama, in its refusal to comply with international transparency standards, is in esteemed company: the United States.
Video

Kremlin Spokesman Denies Panama Report

Dmitry S. Peskov, a spokesman for President Vladimir V. Putin of Russia, said on Tuesday that leaked documents, called the Panama Papers, contained no information about the Russian leader.
By THE ASSOCIATED PRESS on Publish Date April 6, 2016. Photo by Ivan Sekretarev/Associated Press. Watch in Times Video »
Foreign nations have had trouble getting information about accounts their citizens hold in America as well.
“Panama isn’t the real story,” said Matt Gardner, the executive director of the Institute on Taxation and Economic Policy, a research group based in Washington. “This leak is giving a window into a much broader world, but it should be understood as giving a window into how things work in the U.S. as well.”
Since the data leak last weekend, both the firm and Mr. Fonseca have said that they are not responsible for the actions of the shell companies they create.
In the interview on Wednesday, Mr. Fonseca said that the company was careful to vet clients, and that it would drop any it discovered with a “bad reputation.” But he was insistent that his clients were lawyers, accountants and intermediaries — not dictators, for instance.
“We are like a car factory who sells its car to a dealer (a lawyer for example), and he sells it to a lady that hits someone,” he wrote in a message. “The factory is not responsible for what is done with the car.”
Mr. Fonseca said his firm tried to determine “to the best of our knowledge” the actual owner of a shell corporation.
“The industry is becoming more regulated and serious about being used by the bad guys and we welcome this,” he wrote, adding, “But pls remember that 15 years ago the term due diligence was unknown.”
Over the years, courts and government investigators have occasionally managed to puncture Mossack Fonseca’s shield of secrecy.
In Brazil, Mossack Fonseca was linked to a corruption investigation into bribes paid to politicians by companies doing business with the state-run oil company. Investigators began focusing on the firm after finding an array of apartments in the names of relatives of an imprisoned politician.
Recent litigation in the United States uncovered a connection between a shell company set up in Nevada and Mossack Fonseca’s headquarters in Panama. The breakthrough came after almost three years of legal wrangling by the plaintiff, one of the world’s best-financed hedge funds, run by the billionaire Paul Singer.
The hedge fund was trying to track down money that had been siphoned from public coffers in Argentina into illegal shell companies. The hedge fund owned $1.7 billion of Argentine debt dating to the nation’s financial crisis in the early 2000s, and the country was refusing to pay it.
But the hedge fund’s task was not so simple. A shell company known as MF Nevada was claiming that it had no relationship with Mossack Fonseca.
Even the judge found this hard to believe, at one point asking the company’s lawyer what the “MF” in MF Nevada stood for, according to a court transcript.
“I don’t know,” the lawyer responded, eliciting laughter in the courtroom.
During questioning, the person listed on the incorporation documents acknowledged that she took her directions from individuals at Mossack Fonseca. The federal judge in Nevada found that the shell company was essentially an alter ego of Mossack Fonseca, in effect granting the hedge fund access to information ordinarily held behind the law firm’s impenetrable facade in Panama.
“As attorneys we have the duty to provide privacy,” Mr. Fonseca said in the interview.
He feels his firm, in particular, has been robbed of it.
Mr. Fonseca said he was currently working on a novel about an investigative journalist who is “honest and looking for the truth without agendas.” And he has already begun outlining another book.
The working title: “Is privacy a lost human right?”

Correction: April 7, 2016
An earlier version of this article gave an incorrect last name for the secretary-general of the Organization for Economic Cooperation and Development. He is Angel Gurría, not Gerri.

Conflict Resolution in Latin America and Europe - Paulo Roberto de Almeida

My brief notes for an open discussion in an academic meeting in Rio de Janeiro, April 7, 2016 (not reviewed; not for publication)


Conflict Resolution in Latin America and Europe

Paulo Roberto de Almeida
Notes for a debate in an academic workshop
Rio de Janeiro, April 7, 2016

“Each participant will have about 10 min to do an initial statement, and then the Chairs will guide the discussions. We prepared some questions that we would like to address:”


1) What are the most important challenges currently facing Latin America and Europe (migration, social inequality, corruption, terrorism, territorial disputes)?
PRA: Challenges, both in Latin America and in Europe, can be similar or very different; in most of the cases they are very different in nature, scope and dimension. Just to mention the issues selected by the organizers of this session, let us separate the relevant questions affecting, for one side, Latin America, and in the other side, Europe.
Migration, for instance, is a general phenomenon, carrying different aspects according to concrete cases. Latin America is in general as emigrant region: it sends millions of starved people toward more affluent shores, normally in North America, but also for Europe. Europe, of course, is an immigrant region, receiving millions of economic migrants, refugees from conflict zones, politically persecuted people from dictatorships and many other cases, including fake refugees. Most countries, in the Latin American region, are exporting people, due basically for economic reasons, despite some special cases derived from political conflict or civil war: Venezuela and Colombia are examples of both processes: economic migrants and political refugees; Brasil, during its high economic times, ten years ago, was receiving some economic migrants from neighboring countries, but it started again, like in the 80s, to send its brightest sons to other countries, as it is facing one of the most important structural crises in its history, both economic and political. The trend can and will accelerate, if the current recession turns into a depression, as the government seems unable to tackle the source of the crisis.
It is not in my intention to comment about migration, or immigration problems in Europe, but I am perfectly able to discuss migration, or emigration, problems in Latin America. Just to express now, in short words, my opinion about those issues in general: all cases of emigration, historically, are an evidence of a fundamental failure in some region or countries, either because of war, or economic distress; every case of immigration, in its various forms, is a symptom of success, of economic performance, of political stability, of social peace. All countries that receive immigrants, either out of a distress outwards, or out of an individual decision to look after a better life for oneself of his family, will be in a better situation in the near future, because immigrants represent one of the best inflows, in the medium time frame, in terms of human capital.
We do not have in Latin America big territorial disputes, despite some remaining cases between Bolivia and Chile, and between Venezuela and Guyana, but there is no sign that those conflicts will turn to open armed wars. We do not have, either, a terrorist problem, even if in some cases, countries in Latin America – let’s say Argentina, Colombia, Mexico – suffered from terrorist attacks, and even Brazil, in its triple frontier (with Paraguay and Argentina), can be involved in some side effects of terrorism network (money laundering, arms and drugs traffic, etc.). Europe, and marginally the United States, are, of course at the most evident victims of terrorist actions, outside Middle East, Northern Africa, and Southern Asia: it is the historically delayed effect of its past colonialism over millions of people in those region, and its current opening to human inflows coming from them. Either in Latin America, or in Europe, terrorism is a menace that should be tackled more by and with intelligence that with armed operations, but in some cases (in Libya, for instance, both “solutions” are likely).
As for social inequality and corruption, we, in Latin America, are champions in every world ranking that can be conceived to deal with those two relevant questions of political governance and economic performance. Social inequality is a prime and a top subject in social science and economic studies in the region and in the most important think tanks and international organizations dealing with social issues around the world. Either you choose rankings from the Fraser Institute and the Heritage Foundation, such as the annual reports on Economic Freedom of the World, or the Indexes about corruption from Transparency International, you are perfectly able to rank Latin American countries, with very few exceptions (such as Chile, Uruguay and Costa Rica, for instance), among the worst cases of social inequality and corruption in the world. There is no linear correlation between, for one side, income levels and or relative riches and, for the other side, the evidences arising from the high concentration of income and/or high levels of corruption. Corruption is a pervasive phenomenon, and can be found in poor and middle-income countries, as it depends much more of the role of the State and the functionality of the public institutions. Social inequality is inherent of our economic and social processes of nation building and State formation, including because State creation precedes and dominates the process of nation building.

2) How are Latin America and Europe coping with these challenges? How effective are the Latin American/European conflict resolution mechanisms/policies?
PRA: As the challenges are very different, in those two regions, both in nature and dimensions, we necessarily have very different responses in face of those issues. Letting terrorism and immigration questions aside, that are irrelevant in and for most Latin American countries, we can tackle our two most important problems, respectively corruption and social inequality.
Corruption, as already said, is a pervasive phenomenon in our countries, and of course, actually in Brazil, sometimes more evident than in other times. We are traversing one of our worst case of corruption in al times, and nobody can deny that the political mess in which we are submerged today derives from our single most important corruption case. As we also have remarked, corruption is always linked to a huge role of the State not only in the economic realm, but also in every other aspect of the social life. The State in Brazil is a comprehensive and all encompassing body, a Hobbesian persona that covers every space in the life of the country, not only in regulatory matters but also in some areas, of minor impact, that in other countries are let for individual choices of the people. In Brazil, the State pretends to be a baby sitter, telling you where and when, and to whom, you can buy as aspirin or soda drinks, or even if salt recipients can be laid down in restaurant tables. That’s our State, and many Brazilians are proud of it.
Corruption is at the core of the current impeachment dealings being dealt by the Chamber of the Representatives in the Brazilian Congress, but not only and not especially corruption; formally, the accusation is indicting the president because of responsibility crimes against the Constitution, the Fiscal Responsibility Law of 2000, and the budget legislation for the fiscal year of 2015 (even if a previous budget, 2014, was also a part of the entire piece). There are other accusations, but the indictment piece is limited to those “fiscal wrongdoings” during the current mandate. But all this is taking place in the midst of the worst, at all levels, including in the world context, case of corruption never before seen in Brazil, and probably in every other country in the region, in Europe, in the world. The government of PT, Workers’ Party, is being accused of being a mere puppet for a criminal organization, as some evidences arising from investigations by the public prosecutors have already shown.
We cannot talk about a conflict resolution process of any kind in this case of corruption in Brazil: 80% of the Brazilian population wants the dismissal of current government, and have proved its mood by huge manifestations in 2015 and now; only a minority, probably less that 10% of the population, is actually supporting the government and its hegemonic party. Curiously, if we are to consider the recent “manifests” by academic associations, including of Political Science, Historians and Defense Studies, it seems that 90% of the academic community is supporting the government and its party, or at least the boards of those associations intend to make us believe so. More curiously encore, those manifests proclaim their attachment to legality, their strict defense of democracy, their opposition to a supposed coup being conducted by the political opposition and rightist sectors of the society, and the need to preserve some vague “social rights and gains” that could be undermined by an impeachment of the president. In no one of those manifests I found references to the vast corruption scheme being revealed by the investigations, or the already dozens of entrepreneurs or politicians indicted and/or condemned in this context. It is really a shame that manifests by academic people can be so partial and one-sided. History, and the criminal process will prove them wrong.
As regards, social inequality in Latin America, I do not pretend to even tackle the subject, because I would have to deal with plenty of studies and analysis. I can refer for this matter, not to the current studies by sensible economists, but to one single work, written some 180 ago: Democracy in America, by Alexis de Tocqueville. At the start of his sociological essay, Tocqueville states that his vision of the United States was strongly impacted, since the beginning, by what he called the “equality of conditions”. Well, we are all aware that equality of conditions does not exists in Latin America, either in colonial times, or during the building up of the new independent nations, and for the rest of the times, including our times. Some progresses were made, in terms of social and educational improvements, but those were not enough to erase the profound divide between the elites (including academia) and the common people, the poor.

3) What can Latin America and Europe learn from each other?
PRA: Very few, in fact, or almost nothing. I will not deal with conflict resolution in the political domain, because there are no parallels, of any kind, between Latin America and Europe in this realm, and if each region, and each country, exhibits mechanisms for this sort of settlement of conflicts, I think that are few examples that could serve for a comparative exercise in this field. I prefer to deal with economic issues, such as macroeconomic stability, microeconomic competitiveness and sectorial policies, political governance, quality of human capital, and economic opening to trade and foreign investments.
There are no models or receipts for any aspect of political governance, or economic policies, for any country or region. And, even if there were such models, they cannot be transferred or even adapted in other contexts and for other polities. Of courses, we do have some things that we could call “lessons of History”, or we do have nowadays some stuff matters in terms of political and economic governance that are being synthetized by such organizations as OECD and the Bretton Woods institutions, entities that are at the core of contemporary globalization.
If we could try to abridge some prerequisites for a sustained process of economic growth, which is a fundamental condition for social and economic development, with structural transformation and the distribution of its benefits for the population as a whole, perhaps we should indicate some areas of crucial relevance for both economic and political governance, some features that could help to guide the evaluation of the quality of public policies, in each region, that could be able to increase growth (and riches and incomes), reduce the levels of social inequality, and also reduce levels of corruption.
Here are my suggestions, in the fields already summarized above:

(A) Macroeconomic stability: which means, precisely, fiscal responsibility, domestic accounts in order, interest rates in accordance with economic fundamentals (that is, more market based than government fixed), exchange regime also in line with market equilibrium (that is, floating rates, with minimum intervention by Central Banks), and other main features of macroeconomic policies.
Where Latin America and Europe remain, as regards those mains indicators of a “good” macroeconomic performance? Well, Europe, more specifically European Union, has been much more responsible than Latin American countries in those macroeconomic guidelines. Despite some deviants – let’s not name the Mediterranean countries that acted in a irresponsible way in the last few years – most of the countries pertaining to the Euro areas, and many outside this currency zone, performed reasonably well, preserving the economic fundamentals under acceptable conditions. Growth was not formidable, but at acceptable levels, and, more relevant, stability was preserved.
What we could say, in this matter, about Latin America? Well, I can talk about Brazil, during my own generation, that is, young generation during the 1960s, and old people nowadays. Which other country do you know that have changed SEVEN times its currency in a single generation, with a three zeros cut in almost occasions (less once, but last time, much more than three zeros, exactly 2.750 times)? If I disregard the change from the old Portuguese currency, the Mil-Reis to the Cruzeiro, in 1942, here are the currencies that I have had to use since 1967: from Cruzeiro to New Cruzeiro (with a 3 zeros slash), the Cruzado in 1986 (again 3 zeros cut), the New Cruzado in 1988 (new hair cut, because of a accelerating inflation), return to the Cruzeiro in 1990 (without a new cut), the introduction of the Cruzeiro Real in 1993 (again slashing 3 zeros), and finally the Real in 1994, starting with an indexed currency (like the Schacht plan with the new Reich mark in 1923) called the URV, Real Unity of Value, valued at 1:1 against the dollar, and exchanged for the Real after a cut of 2.750 points in July 1994. So, we have had, in Brazil, 8 (EIGHT) currencies in the last two or three generations, against the background of an inflation impossible to evaluate in normal numbers, because it goes to astronomical digits, more than a quadrillion percent from 1986 to 1994. Already the Real, our only currency in the last 22 years, has probably accumulated an inflation of 400%, which is accelerating in the last ten years. Let’s go forward.

(B) Microeconomic competition: It’s very well know that we, in Latin America, especially in Brazil, we live by state monopolies, sectorial cartels, restricted public utilities in the hands of decades-old big companies living in promiscuity with the people who are responsible for those concessions by the Government. Why, if this were otherwise, we like to call some happy few people “kings” of something? King of Soya, king of Meat, king of Cement, king of Steel, king of Telecommunications, and so on. Who are, in fact, those Kings of this or that sector? May be are they brilliant capitalists, exceptional farmers, especially bright people who are able to thrive in a very competitive environment, open to all, and conquering large tracks of the market by their own capacity and spectacular managerial skills? More probably, they are the same old capitalists and bankers who, since the Renaissance (according to Fernand Braudel), engage in the same kind of conspiratorial parlance, against the consumers, that Adam Smith immortalized in unforgettable passages of his Wealth of Nations. Brazil is a typical case of this nature: we have plenty of kings of any sort, some old families controlling entire sectors of the economy, and new barons of emerging sectors in the telecommunications or else, as well as, of course, the inevitable bankers, who support and finance any type of politicians.
There are plenty of examples of this kind of situation in Latin America: if we consult any annual report about competitiveness, by the World Economic Forum, for instance, or some studies by the World Bank about economic concentration in Latin America, especially in Brazil, we would verify the extreme high levels of vertical integration in many sectors, and the important role by the State for this configuration. If you want to learn a little more about the economic concentration and anti-competition practices in the Brazilian business, a feature established totally in line with governmental lines of action, with a particular strength in the last ten years, I would suggest that you read the book by Aldo Musacchio and Sergio Lazzarini, Reinventing State Capitalism: Leviathan in Business, Brazil and Beyond (Cambridge: Harvard University Press, 2014).
There are much more examples, in Latin American, of this special detrimental characteristic of our capitalism. For instance, the richest man in the world: Carlos Slim, of the telecommunications sector in Mexico, and in many other countries, including in Brazil and in Europe. So I stop here about microeconomic competitiveness.

(C) Good governance: Well, there are few parallels that could be put in line in order to allow us to establish analytical comparisons between Europe and Latin America in terms of governance, or perhaps if not by recovering old historical records about the extreme centralization of the Iberian kingdoms, the traditional patrimonialism that was transplanted to the colonies of the New World, and also, stretching a little more the historical record, some specific characteristics of the European ancient Régime, in what it can offer examples of the Absolutist State and even some despotic tyrants. We could start by the simple record, of high historical significance, that Latin America has not had any such thing comparable with the Magna Carta, and the Bill of Rights and equivalent instruments very well known in the European history (and in some of its off-shots). Latin American started as an independent region, free from the old European colonialism, at the same time that democratic revolutions were undertaken in Europe and North America, which were brought together, by some historians, under the concept of Atlantic democratic revolutions.
Perhaps there are few parallels, historical or other, between the two regions, but there are many lessons that Latin America could and can learn from Europe in terms of governance, political or economic. After having beheaded some kings, dethroned others, during the ancient Régime, and engaged in democratic revolutions all-over the 19th century, Europe still continued to produce the worst political experiments at least during the first half of the last 100 years, including bolshevism, fascism, Nazism and some other minor genocidal initiatives. Some totalitarian theories produced in Europe during that period also expanded to other continents, like Maoism in Asia, and variants of Stalinism in North Korea and other countries. It seems that Europe, exhausted, has been vaccinated against outbursts of political cholera such as those described above.
At least, the principles of constitutionalism, rule of Law, political representation, Human Rights, and above all democratic values, all invented or developed in Europe, expanded to other continents, including Latin America. Those features and elements of a normal good governance were brought to, or were imported by many countries in Latin America, countries that, with other counterparts in Southern Europe – Greece, Spain, Portugal – surmounted, around the 1980s, the heavy heritage of previous dictatorships and authoritarian regimes in both sides of the Atlantic. Countries like Argentina and Brazil accomplished some kind of transition from military regimes of the 60s and the 70s, to start new constitutional and political arrangements in the 80s, which included projects of economic integration, a somewhat political deterrent against new falls into authoritarian regimes (as we have saw in the case of Paraguay, and the subsequent democratic clause of Mercosur’s Ushuaia Protocol).
But, at the same time, the ancien Régime-like political constituencies in some countries, with all its side-effects in terms of corrupt governments and the structural features of the eternal social inequalities, produced some less desirable consequences, such as the return of populism in countries already characterized by huge differences between rich and poor people (Andean countries, for the most, but even in Brasil and Argentina). Bad economic governance in many countries of the region, and the poor quality of the new democratic institutions as well as fragile systems for accounting and control of the public finance in almost every country combined with external shocks, or underperformance in the global economy, to precipitate crises of political or economic nature. Immediate or delayed effects of all this mess in the political and economic realms sprayed with less or more virulence in most of the Latin American countries, at simultaneous or various periods of the last four decades (since the 80s): high inflation rates, even hyperinflation in many countries (Brazil, Argentina, Bolivia, Venezuela, Peru), change of currencies, wage and price freezes (non sustained and unsustainable in every country), capital flight, extensive (and inefficient) controls in transaction and capital accounts, successive emergency agreements with the IMF, Paris Club or private and official creditors, black markets, shortages in domestic supply, disinvestment of national and foreign entrepreneurs, trade protectionism and distorted sectorial policies, rupture with global markets, and the list is not complete.
Of course, not all countries underwent the whole array of truly schizophrenic measures at the same time or went through the disaster scenario to the point of political breakdown, but some were more unhappy than others. Venezuela, for instance, seems to be one of the unhappiest country of Latin America, despite the fact that, due to huge oil resources, it exhibited, historically, one of the highest per capita incomes in the region. Rent-seeking behavior of its corrupt political parties created the whole set of conditions for political upheaval and a tentative coup d’État (a Leninist fashioned attempt) in 1992, by a young colonel, Hugo Chávez, who succeeded in becoming elected president at the end of that decade. Despite being considered a “progressive” or leftist leader by many in the academia, in the political spectrum and by its personal behavior Chávez (dead in 2013) was much more alike an European predecessor, Mussolini, and many of his devices for controlling elections, suppressing political adversaries and bailing the press were directly inspired by Hitler comparable expediencies (without concentration camps) during the 1930s. Some other countries took the new “Bolivarian” model as a new way to monopolize political power without resorting to open dictatorships, by manipulation of some old populist tools: distributive policies, “purchase” of a complacent media, and what the Italians call the lotizzazione of the State apparatus, including Supreme courts.
Argentina, after many decades of a continuous political decay, is trying to overcome its “contagious disease” since the Second World War, Peronism, with its many wings, including a whole set of mafia-like trade-unions. In Brazil, finally, the traditional patrimonialism of the old elites gave way of a new kind of a gangster-like patrimonialism, as revealed in the judicial investigations about the criminal practices of the PT against State companies, such as Petrobras, and all other public agencies. The (poor) democratic system is being tested at this very moment by an impeachment process that could top the inept and corrupt government by institutional means.

(D) Human capital of good quality: This is the most suitable lesson that Europe could afford to teach to all Latin American countries, but even here is not easy to see how to transplant and transform very different educational systems, in all three levels of learning, taking into account heteroclite social and administrative structures (and its various kinds of combination State-private supply of education). What is a fact is that Latin America reached an acceptable compulsory first level education enrollment rate many decades after European societies achieved an almost complete universal literacy. Nevertheless, the backwardness in terms of quality of this learning is appalling, as the PISA (mid-level exams in language, science and mathematics) results reveal. This poor quality of the education affects, of course, the productivity gains in the productive sector, but, much more important, the high levels of inequality in income distribution.
Most of the European societies, less than in the United States, but at impressive levels also, are already engaged in a knowledge-society, which constitute another field that could offer opportunities for Latin American countries in bilateral or plurilateral cooperation with Europe. I personally think that is the most promising possibility for the intensification of all kinds of scientific and educational cooperation between the two regions. But the scenario is already changing: during the recent decades, Chinese investors seem to be overcoming the massive inflow of European FDI that was the most important aspect of the European presence in Latin America historically.

(E) Opening to trade flows and foreign direct investments: That is the last and perhaps most important mark of the advanced countries in the world, and of the rapid emerging economies in the developing world: there is an almost perfect correlation between the high income and socially advanced countries and their indexes of economic opening, that is, the coefficient of external trade and a less restrictive framework for foreign direct investment. Latin American countries have been somewhat introverted since the inter-war crises, and engaged, after the Second World War, in a series of experiments of import substitution, subsidies to national industries, and a clear protectionist commercial policy (high tariffs or complete prohibition of imports, with a set of mercantilist-like trade patterns). Besides a much more responsible behavior in fiscal matters, Asian countries (especially in the Pacific basin) were much more open than Latin American ones in terms of external trade and inflows of FDI, even if some of those countries also practiced industrial policies with State-led measures in order to strengthen national champions in the manufacturing sector. But it is also clear that those countries were much more enlightened than Latin American counterparts in terms of mass education and huge private and official investments in science and technology.
If we look at Latin America today there seems to be three very distinct groups of countries, in terms of their integration into the global economy:
(a) A small bunch of globalizers, starting by Mexico and Chile, which were joined more recently by Peru and Colombia; they created the Pacific Alliance, which is less a Latin integration bloc, that is, dedicated to reciprocal trade, than a coordination group to insert themselves in the vast experiment of constitution of an economic integrated space in that basin, which can overcome the last five centuries of world economic dominance by North Atlantic countries in terms of trade, finances, technology and knowledge-based production networks;
(b) At the other extreme, the so-called Bolivarian countries, with the old mix of populist and Statist policies, who are refusing globalization and putting again the central government at the heart of the decision making system, distancing themselves from the market based democratic systems that form the core of the public policies in vigor in the most advanced societies in the world (that is, the OECD club, which has already accepted Mexico, Chile, and many ex-socialist countries);
(c) In the middle, the “reticent” countries, such as Argentina and Brazil, and some other small societies (Paraguay and Uruguay, for instance), where there is no clear definition or choice for either an old “developmentalist” way – with all the retrocession to dirigiste and interventionist policies – or a more open-minded orientation, both in domestic economic policies and with a closer interaction with developed and market-led economies. Due to more than half century-long introverted policies, industrialists and bureaucrats are somewhat reticent to led an unrestricted opening of the economy and a full insertion into a global economy. More than a change in the political leadership of these two countries, what they really need in a mental revolution, which comprises also the so-called “intellectual class”, in fact a large bunch of Gramscian academicians, who have a very heavy influence over the public opinion and the whole educational system.

4) How can civil society and academia contribute to conflict prevention in the region?
PRA: Very briefly, the role of civil society is indeed important in many ways, but the modes of intervention, especially of academia, are too much diverse, depending on the issues that could be involved, and on which kind of civil society and academia we are talking in connection to concrete solutions, or conflict prevention. What are the most important problems in Latin America, historically and event today?
Poverty is still a problem, of course, but also poor education, which is at the basis of the poverty and the high unequal income distribution. Land concentration was the most significant indicator of those social differences, but today less than in the past. The old oligarchs were replaced, in the age of urbanization and mass democratization, by a “bureaucratic estate” that constitute the new patrimonialism: magistrates, high officials, even the academia, and especially the political class, who became a class in itself, with rent-seeking behavior and self-centered.
The State has grow much more than it is needed, and it extracts and absorbs a huge fraction of the riches created by workers and entrepreneurs of the private sector, and create, by its own macroeconomic and sectorial measures, distributive conflicts because of the contradictory policies the political class implement from the Executive and the Legislative bodies. In fact, State policies preserve, maintain and increase poverty, by pushing inflationary decisions, a too protective domestic supply, a clear preference for the higher levels of education strata, the litterati (who grab a much larger fraction of the budget that the millions at the primary levels of education), and a political system serving all these “corporations” linked to the State.
Drug trafficking, drug consumption, widespread violence are the most common problems in most of the Latin American countries, and there are no clear signs that the academia is engaged in thinking about adequate diagnostics for those acute fleas or is seriously engaged in finding solutions. Many in academia are in fact proposing decriminalization or liberation of drugs, any kind of them, and still consider urban delinquency as a mere consequence of poverty and inequality, adopting a “victimist” approach to this question that tend to put the blame on the society, not on individuals.

5) How have Latin American countries and regional organizations responded to major international crisis such as Syria?
PRA: Really, being a diplomat, I do not see a clear role for Latin American countries in such a major crisis as Syria’s. We can at most have a secondary or an auxiliary role, in terms of UNO resolutions, and humanitarian relief. Brazil is admitting a certain number of Syrian families, because of a large historical community of the same stock, immigrants from a century ago, or less. Besides that, I do not see any relevant support from the Latin American region as a whole for a comprehensive solution to this terrible war. Middle East, as a region, is the most intractable situation in the whole world, and a global solution to its social, economic, political and geopolitical problems is not in sight in the near or the middle-range future.

6) How can they contribute to conflict resolution and peace-building at the international level?
PRA: Not originally, I would just recommend a little more home work, at its best: first of all, we have to overcome the “menaces” to world peace arising inside the region. What are they?
Emigration of its own people, first of all, I mean of the economic type. Exporting poor people can be an individual solution, but it is also a clear sign of failure to solve the most important problems in a society: education and employment opportunities. Latin America has to improve hugely its educational and economic (macro and micro) policies. Connected to that, put a clear end to populism, which of course is linked to the electoral and party systems, but those initiatives depend on a mentality change. Here, the academia could help, if it was not so self-centered.
Urban violence, and the residual guerrilla warfare in some countries (Colombia, of course, but also Peru, and some Central America countries), huge problems that are clear linked to drug production and trafficking, with enormous consequences even in transit countries, obviously already in Mexico, but also a growing problem in Brazil.
Corruption is also a local, national, and a continental problem, that has many international connections and consequences. Those are the most important problems, which Latin America is “exporting” to the rest of the world.
Solving those huge problems, by its own means, could be a positive contribution of the region for the world. Becoming “normal” countries – in economic policies, in education performance, in employment opportunities – could be the most relevant help the Latin American countries can offer to the world. Do not be a problem, be a solution.
It is simple, it is naïf, but it is needed. The world, the UNO, or the Middle East crises, for instance, are not waiting for a Latin America huge help in any kind of geopolitical or economic support for the most urgent and pressing problems in the current juncture. Not being a problem is already a big help. Let’s do it…

Paulo Roberto de Almeida
Brasília, 7 de abril de 2016.