Brazil's Economic And Political Future
Twenty-six brief chapters on contemporary Brazil, two-thirds of them by Brazilians, provide an illuminating composite picture by focusing on the role of political parties, the military, the church and women in politics, and by examining Brazil's economic problems and potential from a variety of angles. Although several essays seem ephemeral and perhaps superfluous, this is a useful and reasonably up-to-date collection on an important country.
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The United States is spreading its aid and efforts too thin in the developing world. It should focus on a small number of "pivotal states": countries whose fate determines the survival and success of the surrounding region and ultimately the stability of the international system. The list should include Mexico, Brazil, Algeria, Egypt, South Africa, Turkey, India, Pakistan, and Indonesia. A discriminating strategy for shoring up the developing world is a wise way to address traditional security threats and new transnational issues; it might be thought of as the new, improved domino theory. If effective, it could forestall the move in Congress to wipe out nearly all foreign aid.
The global financial crisis has eroded developing nations' faith in modern capitalism itself, and the meltdown of Brazil's currency was grim evidence that the chaos is far from over. But few lessons have been absorbed. That had better change. Key Wall Street and Washington players do agree that crisis management was muffed, the nature of contagion misunderstood, and the importance of local politics underestimated. But they argue over the pace of fiscal liberalization, the efficacy of the IMF rescues, and the importance of "moral hazard." Herewith, a politically realistic plan to bridge the gaps and gird for the next, inevitable disaster.
In the run-up to the October presidential election in Brazil, financial markets panicked at the prospect of a left-wing administration that might want to repudiate national debts. Now that Lula has taken office, will he confirm these fears or embrace prudent policies that will advance the modernization of Brazil? And will the markets even give him a chance?

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