Minister of Finance says Brazil has problems that many other countries would like to have

Minister of Finance, Guido Mantega, speaking at a hearing before the Economic Affairs Commission of the Senate, declared that although Brazil has its problems, they are “good problems.” He declared that the country is quite able to take care of the problems it has. And he went on to say that the problems Brazil has are problems many other countries would like to have. “We have problems like an excess of foreign capital, low unemployment and a lack of skilled workers to meet the demands of a growing labor market.” Mantega went on to point out that the problems are consequences of development and not stagnation. “We have the ability to take care of these problems and maintain a strong rhythm of growth,” he emphasized.

The minister said the government had the tools to control the situation, for example, by tightening credit if there was pressure from inflation. He went on to say that if the government was not efficiently controling the situation the dollar (now hovering around R$1.60), would be below R$1.40, which would be disastrous for the real.

“Speculative attacks have been made against Brazil and that is why we must remain alert. Brazil is a privileged country, with forecasts for $69 billion in direct foreign investments this year. Some of that money is welcome because it is not hot money, it will be invested in Brazil,” said the minister.

Mantega also said that steps were being taken to ensure that Brazil does not become just an exporter of commodities and a huge importer of manufactured goods. “We will not allow that to happen,” said Mantega. “We are being careful to protect Brazilian companies from too much exposure to foreign indebtedness and dangerous exchange rate problems.”