Fernando Henrique Cardoso

Fernando Henrique Cardoso (Rio de Janeiro, June 18, 1931) is a Brazilian sociologist, politician, political scientist, philosopher and university professor. Professor emeritus at the University of São Paulo, he also taught at the University of Paris I Panthéon-Sorbonne. He was an ECLAC official, Senator of the Republic (1983-92), Minister of Foreign Affairs (1992-1993) and Minister of Finance (1993-1994). President of the Republic from January 1, 1995 to January 1, 2003. He also belongs to Global Elders (a group of eminent global leaders convened by Nelson Mandela and Graça Machel).

He is a Knight Grand Cross of the Order of the Bath and holds the Grand Collar of the Order of Santiago de la Espada and the Grand Collar of the Order of Infante Don Enrique.

Graduated in Sociology from the Faculty of Philosophy, Letters and Human Sciences of the University of São Paulo, Cardoso has developed an important academic career, having carried out various studies at a regional, national and global level, and has received various awards and mentions honored for their work. He was chosen by Foreign Policy magazine as the 11th ^er most important global thinker, in 2009, for his thought and contribution to the drug policy debate. He is co-founder, militant and honorary president of the Brazilian Social Democracy Party (PSDB).

A native of Rio de Janeiro, Cardoso moved with his family to São Paulo at the age of eight in 1939. In 1953 he married anthropologist and former university colleague Ruth Vilaça Correia Leite, later called Ruth Cardoso (died in June 2008), having three children with her. Currently, Cardoso chairs the Fernando Henrique Cardoso Institute (iFHC), a Brazilian think tank founded by him in 2004, which has been elected by the University of Pennsylvania as one of the most important think tanks in the region, in 2011. He also participates in various advisory councils in foreign organizations, such as Brown University, the Clinton Global Initiative and the United Nations Foundation. He also occupies chair number 36 of the Brazilian Academy of Letters since July 27, 2013.

Origin and rise

Graduated from the University of São Paulo. He is co-founder and honorary president of the Brazilian Social Democracy Party or PSDB. (in Portuguese: Partido da Social Democracia Brasileira). In 1985, he ran for mayor of Sao Paulo, but was unsuccessful.

He was Chancellor and later Minister of Finance in the government of President Itamar Franco, being one of the creators of the so-called Real Plan, which was an economic program designed to replace the currency to contain the enormous inflation that plagued the country. Before applying the plan, the accumulated annual inflation was 5014%, while the year 1994 could end with a CPI of 929.3%. In the general elections of October 3, 1994, he had the support of President Franco to run as a candidate.

Cardoso's main challenge would be to stabilize the economy to provide security for foreign investment, since by 1993, Brazil had only received a liquid investment of 714 million dollars, even less than the 720 million that Colombia had achieved and well below the 2,059 million dollars of liquid investment reached by Argentina that same year. In 1994, with the success of the Real Plan, the situation began to reverse, ^{[citation required ]}Brazil received 1,971 million dollars, although it was still below the 2,480 million dollars harvested by Argentina.

Presidency

Cardoso with his Russian counterpart Vladimir Putin in Moscow on January 14, 2002.

Heyday

Cardoso's government was neoliberal in nature like most of those who led the region in the 1990s. The main objective of his management was to reduce inflation to single digits, an objective that was quickly met by going from a CPI of 22% in 1995 to one of 9.1% in 1996 and which would then continue to decline until it reached 2.5%. in 1998. Cardoso continued with the economic opening initiated by Fernando Collor de Mello. Between 1991 and 2001, the Brazilian State raised 103.3 billion dollars for the privatization of public companies, led by the telecommunications and electric power sectors. The normalization of the economy generated a boom in domestic consumption, which attracted numerous investments seduced by the magnitude of the Brazilian market. This in turn made it possible to improve tax collection and achieve the consolidation of public accounts, however, the State debt went from 14% of GDP in 1994 to 55.5% in the year 2000, mainly due to the high rates of interest offered by the Central Bank of Brazil.

In the social field, unemployment remained around 5.5% during his first term, although in the second it was on the path to above 7%. In the educational field, there was a cut in contributions that went from 20.3% of GDP in 1995 to 8.9% in 2000, however, there was a notable improvement in terms of public health, especially when José Serra took over the ministry. During his administration, generic medicines were imposed, free medicines for the fight against AIDS were distributed and health care posts were established throughout the Brazilian interior.

During these years, Brazil also played an important role in various conflicts at the regional level, sponsoring the peace agreement between presidents Jamil Mahuad and Alberto Fujimori, ending the war between Ecuador and Peru. He also intervened in the Paraguayan crisis, which ended with the fall of President Raúl Cubas and the exile of General Lino Oviedo. A year later, Brazil began to feel the effects of monetary contraction and high interest rates, which affected directly to the activity level. Unemployment increased and many companies had to close their doors due to the impossibility of being able to compete with imported products, both due to trade opening policies and the overvaluation of the currency. In turn, the fiscal and external deficit had to be covered through both internal and external financing, generating a continuous increase in public debt and interest rates. The response of the monetary authorities was that the fiscal deficit would be solved by deepening the adjustments in public spending.

Fernando Henrique Cardoso in his second inauguration at the Brazilian Congress on the 1st. January 1999.

With the success of the economic plan, Cardoso had enough support to change the Constitution, enabling immediate presidential re-election. In the general elections of October 4, 1998, Cardoso again faced Lula da Silva, as he had in 1994, winning once more.

Economic crisis

Cardoso after a colloquium at the Casa de la América Latina in Paris, January 2019.

Despite its success in inflationary and exchange terms, the Real Plan showed shortcomings to solve the problems of commercial and fiscal deficit, which were covered through external financing attracted by the high interest rates offered by the Central Bank. The external deficit did not worry the authorities as much, since the increase in imports was a logical consequence of economic stabilization and exchange rate appreciation. It was assumed that the importation of capital goods would lead to higher rates of internal productivity and therefore to generate more competitive industries, which would later have repercussions in higher exports. The real problem seemed to be the fiscal imbalance for which various measures were applied., such as cuts in public spending and tax increases. The economic team of President Cardoso was confident that the situation would be gradually resolved thanks to productive restructuring and fiscal adjustment measures. Meanwhile, this process would be financed thanks to extreme international liquidity.

However, problems began to emerge in 1997, towards the end of Cardoso's first term. The crisis originating in Southeast Asia immediately spread to the rest of the emerging markets, cutting their credit lines. Faced with this new situation, the Brazilian government did not question the economic program, but rather the timing of its application. A broader adjustment plan was announced to reduce the fiscal deficit as soon as possible, and interest rates were raised to retain foreign capital. However, the increase in rates did nothing more than increase the volume of foreign debt and make it difficult to finance the productive apparatus.

This economic policy caused the country's growth to be almost zero, increasing the unemployment rate in parallel. The situation seemed to improve in the first months of 1998, when there was a strong inflow of capital, although the country's exports fell after a fall in the price of raw materials. The subsequent collapse of Russia and the increase in the Brazilian external deficit began to worry investors. Cardoso's re-election and the high reserves accumulated in the Central Bank were not enough to avoid the collapse of the stock markets and a constant flight of capital. At the end of 1998, the country reached an agreement with the IMF along with other multilateral organizations and developed countries. The agreement established that Brazil would have a shield of 41 billion dollars, whose main objective would be to reduce interest rates and deter possible speculative attacks against the Real. As a counterpart, Brazil had to apply fiscal adjustment measures that would be controlled by the IMF.

Although the Monetary Fund made a first disbursement of 9.4 billion dollars, the outflow of capital deepened in December 1998, causing a new drop in the level of international reserves. Finally, in January 1999, Cardoso had to yield to pressure by expanding the floating band of the Real by 8%. This partial devaluation only deepened the demand for dollars and the fall in reserves, so two days after the announcement it had to go to a regime of free float, with which the currency lost 60% of its value in just one month. The price went from 1.21 reales per dollar in December 1998 to 2 reales per dollar in February 1999, after which the currency began to recover by fixing a devaluation of around 40%. Despite fears and bad omens, the Brazilian economy revived in the second half of 1999 and many companies ended the year with good profit rates.

In the general elections of October 2002, Cardoso supported the presidential candidacy of José Serra who was defeated by Lula da Silva, the highest representative of the Brazilian left.

In Cardoso's cabinet, Pedro Malan (Treasury), Bresser Pereira (Science and Technology), Pelé (Sports), Nelson Jobim (Justice and then Defense), Sarney Filho (Environment), Luiz Felipe Lampreia and Celso Lafer stood out (External relationships).

Later Performance

Since his departure from the Cardoso government, he has dedicated himself to seminars and to an Institute that bears his name. He continues to work behind the scenes of politics, criticizing the Lula government and promoting his party's candidates.

In 2008, the Konex Foundation of Argentina awarded him the Konex Mercosur Award as one of the most outstanding personalities of the Institutions-Community-Business of that decade in the region. She is a member of the Club de Madrid.

In 2022, he supports Lula da Silva for the second round of the presidential elections in Brazil.