Recent increased Brazilian government intervention in some of the country's largest companies calls into question where leadership is trying to take the country - into the future or back to the past? This FT article notes how comments by President Luiz Inácio Lula da Silva suggesting the federal government should play a larger role in some of the country's biggest and most successful businesses have put international investors on edge.
For some, it harkens back to government activism of a decade ago, before the country entered one of its worst recessions on record. While others place more blame for that downturn on structural and international economic conditions, government activism in the economy is nothing new in Latin America and has not led historically to positive outcomes, despite any short term growth or social progress that may result.
These comments, made, notably, after the long-running Lava Jato corruption case was closed and convictions of some of the country's most powerful - including Lula - annulled, suggest that leadership may be trying to recreate a nostalgic past, rather than implementing creative solutions to meet the challenges of the future.
"The controversies have raised the spectre of state activism that often failed or proved costly when Lula’s party was previously in power earlier this century, which following a boom ended in a deep downturn for Latin America’s largest economy."
https://www.ft.com/content/0826a3ab-a5d0-444d-84ca-48606b682876?shareType=nongift
