Celso Amorim - Brazilian Government Minister (2003 - January 2015) HARDtalk

Welcome to HARDtalk with me, Zeinab Badawi. Brazil in South America's

biggest and most populous country and should be a key force on the

global scene but instead expressed in Dilma Rousseff find yourself

battling for political survival. She could be impeached over alleged

economic mismanagement which is led to widespread corruption at the

state level and Brazil could be spiralling into the worst economic

recession in decades. My guest is the Brazilian politician, Celso

Amorim, who has served the last three presidents of Brazil, first is

a longtime Foreign Minister and then as Defence Minister until January

this year -- has. Is Brazil teetering on the brink of a major

political and economic crisis? Celso Amorim, welcome to HARDtalk.

You really are a veteran Brazilian politician with nearly a decade as

Foreign Minister and then for the last three years, you were Defence

Minister until you left the cabinet in January. Were you deserting a

sinking ship? I didn't see it that way at all. Actually nobody saw it

that way. I think the crisis was much bigger than everyone thought. I

had been almost 13 years as a minister in the cabinet, I think it

was enough. I asked you whether you were deserting a sinking ship

because a year ago, Dilma Rousseff, the president, wins reelection and

now we see her approval ratings are so low, only about 8% of Brazilian

people think she is up to the job. What went wrong? Resilience are very

passionate so the changes are very extreme sometimes -- Brazilians. We

had a couple of things, two or three things, that really influenced that.

Of course, a recession which was much bigger than we thought it could

be. Partly because... All people in government had wishful thinking, we

thought we could improve the international markets which they

didn't, especially China. We will come to the economics in a minute

but on the political side, she's battling for survival. I don't have

any doubt that she will continue to be president of Brazil. I think it

is very important institutionally that she is kept that way. She was

elected, after all. It was fair and democratic. So I hope she will stay

but there are still difficulties. Let's look at just one of those

difficulties. She is already under investigation for allegedly cooking

the books. $27 billion of public spending hasn't been properly

counted for. Brazil's federal watchdog but TCU rejected her

accounts for 2014 and the suggestion is that perhaps there was an idea of

making the economic situation look a bit rosier than it really was in

order to secure her reelection. I am not an economic specialist. I cannot

really judge this kind of thing. But it is very important... This is not

a scandal in the sense that there was any fraud or anything like that.

There is a view by the TCU, a kind of accounting office, which thought

that it was improper. Well, it is up to Congress to judge now. $27

billion? It was not money taken from somewhere. Basically what had

happened was, it was lending from official banks to the treasury, that

is how I understand it happened. It wasn't properly accounted for. This

is the allegation, that the government had liabilities for

social programmes on the books of state banks rather than funding them

directly from the budget. Indeed come at the former president came to

her defends, and said that was done in order to protect very important

welfare programmes like social welfare spending for poorer

families. It is one of the greatest programmes in the world. But that is

not the point. The fact is, that as a representative from the business

school in Rio said come of this will definitely lead to impeachment

process. That is his opinion. Congress has to decide. The

accounting office has a more important name in Brazil. It is

called the court of accountancy. The federal audit court. Yes. But it is

really an advisory body. It gives its opinion to Congress and it is up

to Congress to judge. My personal opinion is that it won't happen. But

it is up to Congress to make the final judgement. All right. The

second big problem for Dilma Rousseff was that the Brazilian

election watchdog has opened investigations into alleged illegal

funding of her 2014 election campaign. Again, it is not for me to

speak about something that is under Justice scrutiny, so to say. I

cannot judge. I personally don't think there was anything irregular

but I don't know, I wasn't involved in collecting money or anything like

that. Sure. And I am sure she is a very honest woman. I have to say she

denies any wrongdoing in any of the allegations, I'm going to make that

clear. I firmly believe, and I think the Brazilian people firmly believe,

they may not be happy with the situation as it is because nobody

likes unemployment, nobody likes the risk of inflation in a recession,

and these are true things that have to be tackled, but I don't think the

other accusations will hold, honestly. You really don't? We have

seen lots of public affection and protests from many venues. You have

to see come of this is a Brazilian government, and it means 12 years in

power of the Workers Party in Brazil which is geared towards social

change. And especially to tackling the main problem of Brazil. You have

been there, you know, it is any quality. And they did. And it

creates a lot of resistance and reaction -- any quality. There is

the oil scandal... Celso Amorim, thank you for raising that because

that is the third scandal I was going to come to. They can't get her

on the oil, so they try to get her in other areas and when they can't

get that, it is not enough, they move onto something else. More than

$2 billion in kickbacks is alleged that the state owned oil company,

Petrobras. It is making headlines Petrobras. It is making headlines

all over the place. Dozens of former executives and politicians from the

Workers Party have been jailed. The press has been saying this. We have

all been following this. But Dilma Rousseff was the energy minister

from 2003 -2005 and therefore, she was not the chairperson -- she was

the chairperson and presided over this mismanagement although she

wasn't in charge, as you were saying. Lots of people don't know

what happens below their level of policy decisions. I don't know how

Petrobras works, I have never been. I don't know how they make their

decisions, but I can be sure, because I know her personally, and I

know how severe she is with any suspicion of anything wrong, not

only a scandal like that but things that others might consider minor,

she's very severe. But the fact is... It is regrettable, I have no

doubt. But there are congressmen from many parties who are openly

looking at the benefits of impeaching the president. I want to

ask you very simply, do you believe she can survive? She says she won't

resign, she said that in interview, can she survive? I'm sure she will

survive. I'm sure she will, because the Brazilian institutions have to

be preserved. She had a difficult election and there were many mutual

allegations. But can she govern if there is a protracted and link the

investigation process going on to impeach her? It is a big test but

she is a courageous woman puppy as you know, she was tortured during

the dictatorship and she was able to go on with her ideas and her fight

for democracy and so on, so I believe in her power of resistance

and I believe in her honesty. I don't work for her anymore and I am

an independent now. But you were a member of the Workers Party. Yes.

But I quit at the end of last president's rule because I didn't

know what I was going to do. You are distancing yourself. You mention the

people of Brazil and how Brazil itself is always synonymous with the

huge gap between rich and poor with the worst levels of income disparity

in the world. The Workers Party came in and said they wanted to be the

voice of the poor. It has improved in Brazil, the inequality. The

country had no growth but the only thing that increased was inequality

and we change that. You are making it better and that is why the

president before Dilma Rousseff was a popular one, and that is why she

was elected in 2010 and then reelected in 2014 but the fact of

the matter is the people who voted the party into power are now really

unhappy. We've seen hundreds of thousands of people marching on the

streets last year and this year. I will give you the example of Sao

Paulo were 69-year-old woman was marching along saying she was

worried about inflation, she said she was spending more than half of

her retirement income in the supermarket purchasing food and now

electricity. She said conditions of life had gone downhill. I don't know

if they had gone downhill. She says it has. It is a hard time we're

going through. I have no doubt about that. But I'm sure we will go out of

that, I have no doubt of that and then we will have a country that is

fairer and in which more people have opportunities. If you look even at

the colour of people who complained when university funds are

detained... Let me ask you about economics happy you say things will

get better but people say Brazil is facing the worst recession since the

1930s. Unemployment, 10% and rising. Inflation, about 7%. Sorry, it is

the other way around. GDP is expected to shrink by nearly 3% this

year. Junk status for credit ratings. The picture is very bleak.

We're accustomed to difficulties and fighting through them. I think

Brazil had three big problems and three big deficits. One with the

democracy deficit. -- was the. The Justice Department is now working

very clearly and very freely and these accusations are proof of

that. We had economic stability which is now in a difficult

situation but it is not what you used to have with an implement of 60

-80% and that is how I grew up to the age of 60. I think it is under

control it will getting control. Exports are already increasing

because the exchange rate is becoming more realistic. I think we

are suffering what people call the Dutch disease. The price of

commodities are high and we wrongly believed, I agree, that that would

last forever. So we are paying for that wishful thinking but I don't

get will be a disaster. It is a more equal country, a country in which

everyone can speak. Not only the rich but also the poor. I'm not

distracting from some of the economic benefits that have

accrued. But just looking at the hearing now and the future, the

economic slowdown in China has meant that there is a weakened demand for

Brazil's commodities and we know that. You are still very much an

economy is based on commodities, as you say, unfortunately, so when you

look at the government now and its expenditure is outpacing what it is

getting in return and that is causing huge problems for the

government. That is true. The focus of the government is precisely on

that point and it sometimes creates further difficulties in the

short-term because anywhere in the world when you have fiscal

policies, and high interest rates, you could always discuss if they can

be lower. If credit could become a little easier so that the economy

will pick up. But anyway, these are difficult times. But you were

looking at austerity measures? Are you doing what you have to do. She

is. She is trying. She had this massive cabinet reshuffle and got

her new finance minister who is contemplating tax increases. But his

moves have been resisted by the president's own members of the party

because they are saying they want to go in the opposite direction, they

don't want austerity measures. They understand the need. When it comes

to choosing what the expenditures to be cut are, it is important to keep

the social programmes. That isn't essential aspect of the Workers

Party -- is an. That is why they were elected. I'm not saying the

previous governments did not have social programmes, they did, even

the military government did, but it was the first government that put

the priority in attacking these most important, shall I say, the plague

of any quality in Brazil. But now the spillage outpaces

revenue and Joaquim Levy is trying to do something about it. But there

are influential voices in the Workers Party talking about reining

in unemployment benefits. They say the government should not do this.

It is playing with fire. There is always discussion about where

pensions should be. It is very difficult to maintain... Again, I'm

not an economist... But you have been a cabinet minister for 13

years. We work in a different way. People did not meddle so much with

foreign policy and I would not meddle with what other people were

doing to such a large and, but I think that if there was a mistake,

it was that there were too many tax cuts. They were taken in 2008 and

2009 because that is the way to help the economy but I think that had to

be corrected at some stage. And that is what is happening now and there

is a great deal of pain, the very constituents of the Workers Party,

to the extent that one consultant has said that President Dilma

Rousseff has drifted away from her party's way of thinking. I don't

know if he belongs to the Workers Party but... I did not say that he

did. But why should he say that? He should speak about his own party. He

is an analyst. But anyway, when you see people in big numbers, and I

don't despise that, that is important, but they were

middle-class people. They were mostly middle class and upper

middle-class people. I also put it to you earlier on that even those

people... They have been out on the streets. I don't deny that they were

suffering but these people were expressing themselves in calling for

her engagement, most of them, maybe not all, but most of them were

middle-class. Really, I have to say to you on this point that we have

seen banners being carried by people protesting in the streets saying

that Brazilians are sick of corruption and Dilma Rousseff must

go. Clean lethal. This is not the middle-class or the elite. I can

tell you will stop I know them. You know all of these hundreds of

thousands of protesters? You know every single one of them? I cannot

count everyone but looking at the faces, the colour, you can say 80%

are uppermiddle or middle-class. Given this, can result... And is

serious stuff I don't deny. The middle-class still has to survive.

Given us, can Brazil afford to host the Rio Olympics next year? I think

that the Games will be a great occasion for people to go to

Brazil. People are always sceptical about Brazil. When we had the World

Cup... $11 billion! And they'll was that game with Germany. But on the

other hand, the World Cup run smoothly. No violence at all.

Nothing. But did it create lasting business? The idea was that it did

not. It cost $11 billion it is a long-term thing. Is like foreign

policy. When we started trading with India and China, people said the

real markets where in Europe and the US and that we would not gain

anything, but you have to look at the long wrong. This is not just did

for that. You bring up our Brazil has relations with India and China.

You are the first letter in the BRICS nations. But the second letter

is Russia. The Russian Foreign Minister says that these five

countries illustrate a multipolar system of international relations.

Is that how you see it? That this is a vehicle for Brazil to project its

world power? Among other things. Especially in the economic sphere,

where the World Bank and IMF are based on rules which are totally

based on the past. The old Western powers. Small European countries,

really small European countries, have quotas that are bigger than

India and Brazil. Voting powers that are bigger. You are talking about

building. When President Bush called the G20 for the first time, they did

not call those countries. Be called Brazil, India, Russia... You see it

as a vehicle for a middle power like Brazil to project its global image?

It is part of it, guess. But we have other things. We have South American

integration, which is very important, of course. We keep peace

with our neighbours. It seems like something given by God but it is

not. It is kept by diplomacy and hard work. Are you that much of a

regional player? Partly because you are Portuguese speaking and the rest

of the Continental speaks Spanish, although I know the languages are

similar, Brazil just seems... Diana speaks English and Suriname speaks

Dutch. But Brazil seems to be insular. You don't trade very much

because you are not a big trading nation with your neighbours...

Brazil was a Connolly. Our old trade basically was the Europe and US. So

you are not much of a regional force, really. Things have changed

quite a lot, the pattern of trade. I believe that we are probably the

biggest market for countries like Uruguay, Paraguay and Argentina

after China. Maybe China has surpassed us but that is a different

reason altogether and that is a big change. It is still of course our

biggest trading partner from our point of view. They are still China,

the US and Argentina. What about south-south cooperation. President

Lula made a great point about local ties. The biggest African Diaspora,

the biggest African population. But there we saw President Lula opening

up embassies all over Africa and we saw trade between Africa and

Brazilian trade to Africa went out to $28.5 billion in 2013. You do

that but President Dilma Rousseff is now going around enclosing these

embassies. No embassies have been closed. She is not as keen. I can

only comment on the details of foreign policy or diplomacy because

I have to respect what has been done by my successors. But I think

President Lula was certainly more than extrovert in terms of

international relations than President Dilma Rousseff but no

embassies have been closed. We continue with the same policies.

Just now, we're having a summit in South America with Arab countries,

which was a creation of... She is not going to and do many of those

foreign policy achievements? No. Of course I believe that quantity is

always important but... And the US? Interests online? We have

established a very good dialogue. We had too visit of President Bush to

Brazil. And I met with Condoleezza Rice and Hillary Clinton. We had

many disagreements but... You have rebuilt trust? It was never really

at risk, that trust. We may have agreed or disagreed but we have

respect from the US. Very quickly and briefly. Brazil with years of

boom behind it is sinking to a new low? I think that you have to take a

long-term line and the long-term line is a growing one and a rising

one. Thank you for coming onto the programme. Thank you.