The real will only be successful when Brazilian and international interest rates are equal, says Persio Arida published by Wilson Center (7/2012).
A few days after its 18th anniversary, Plano Real is still not considered a total success by one of its creators, economist Persio Arida. Arida was a Public Policy Scholar at teh Center, during which time he wrote a seminal concept paper on economic stabilization in Brazil. He is a managing partner and Chairman of the Asset Management of BTG Pactual, Latin America’s largest independent investment bank. According to him, the Real project will be fully completed only “when Brazilian interest rates are the same as international rates, when Brazilian credit is on par with that of other emerging countries, and when credit is available for long periods of time and in large amounts.” The lower rates of growth Brazilian economy is experienced is not caused by a lack of optimism nor entrepreneurship, he said. “The problem for our country is the excessive tax burden and the great weight of subsidized and directed credit and excessive state intervention.”
