:00:00. > :00:19.Welcome to HARDtalk with me, Zeinab Badawi. Brazil in South America's
:00:20. > :00:24.biggest and most populous country and should be a key force on the
:00:25. > :00:29.global scene but instead expressed in Dilma Rousseff find yourself
:00:30. > :00:33.battling for political survival. She could be impeached over alleged
:00:34. > :00:38.economic mismanagement which is led to widespread corruption at the
:00:39. > :00:41.state level and Brazil could be spiralling into the worst economic
:00:42. > :00:46.recession in decades. My guest is the Brazilian politician, Celso
:00:47. > :00:51.Amorim, who has served the last three presidents of Brazil, first is
:00:52. > :00:55.a longtime Foreign Minister and then as Defence Minister until January
:00:56. > :00:57.this year -- has. Is Brazil teetering on the brink of a major
:00:58. > :01:32.political and economic crisis? Celso Amorim, welcome to HARDtalk.
:01:33. > :01:34.You really are a veteran Brazilian politician with nearly a decade as
:01:35. > :01:37.Foreign Minister and then for the last three years, you were Defence
:01:38. > :01:45.Minister until you left the cabinet in January. Were you deserting a
:01:46. > :01:49.sinking ship? I didn't see it that way at all. Actually nobody saw it
:01:50. > :01:55.that way. I think the crisis was much bigger than everyone thought. I
:01:56. > :01:59.had been almost 13 years as a minister in the cabinet, I think it
:02:00. > :02:05.was enough. I asked you whether you were deserting a sinking ship
:02:06. > :02:12.because a year ago, Dilma Rousseff, the president, wins reelection and
:02:13. > :02:15.now we see her approval ratings are so low, only about 8% of Brazilian
:02:16. > :02:21.people think she is up to the job. What went wrong? Resilience are very
:02:22. > :02:27.passionate so the changes are very extreme sometimes -- Brazilians. We
:02:28. > :02:32.had a couple of things, two or three things, that really influenced that.
:02:33. > :02:39.Of course, a recession which was much bigger than we thought it could
:02:40. > :02:42.be. Partly because... All people in government had wishful thinking, we
:02:43. > :02:46.thought we could improve the international markets which they
:02:47. > :02:49.didn't, especially China. We will come to the economics in a minute
:02:50. > :02:56.but on the political side, she's battling for survival. I don't have
:02:57. > :02:59.any doubt that she will continue to be president of Brazil. I think it
:03:00. > :03:06.is very important institutionally that she is kept that way. She was
:03:07. > :03:10.elected, after all. It was fair and democratic. So I hope she will stay
:03:11. > :03:14.but there are still difficulties. Let's look at just one of those
:03:15. > :03:21.difficulties. She is already under investigation for allegedly cooking
:03:22. > :03:26.the books. $27 billion of public spending hasn't been properly
:03:27. > :03:30.counted for. Brazil's federal watchdog but TCU rejected her
:03:31. > :03:33.accounts for 2014 and the suggestion is that perhaps there was an idea of
:03:34. > :03:37.making the economic situation look a bit rosier than it really was in
:03:38. > :03:43.order to secure her reelection. I am not an economic specialist. I cannot
:03:44. > :03:47.really judge this kind of thing. But it is very important... This is not
:03:48. > :03:54.a scandal in the sense that there was any fraud or anything like that.
:03:55. > :03:59.There is a view by the TCU, a kind of accounting office, which thought
:04:00. > :04:09.that it was improper. Well, it is up to Congress to judge now. $27
:04:10. > :04:14.billion? It was not money taken from somewhere. Basically what had
:04:15. > :04:19.happened was, it was lending from official banks to the treasury, that
:04:20. > :04:22.is how I understand it happened. It wasn't properly accounted for. This
:04:23. > :04:25.is the allegation, that the government had liabilities for
:04:26. > :04:28.social programmes on the books of state banks rather than funding them
:04:29. > :04:33.directly from the budget. Indeed come at the former president came to
:04:34. > :04:40.her defends, and said that was done in order to protect very important
:04:41. > :04:43.welfare programmes like social welfare spending for poorer
:04:44. > :04:49.families. It is one of the greatest programmes in the world. But that is
:04:50. > :04:56.not the point. The fact is, that as a representative from the business
:04:57. > :05:00.school in Rio said come of this will definitely lead to impeachment
:05:01. > :05:02.process. That is his opinion. Congress has to decide. The
:05:03. > :05:07.accounting office has a more important name in Brazil. It is
:05:08. > :05:13.called the court of accountancy. The federal audit court. Yes. But it is
:05:14. > :05:17.really an advisory body. It gives its opinion to Congress and it is up
:05:18. > :05:22.to Congress to judge. My personal opinion is that it won't happen. But
:05:23. > :05:28.it is up to Congress to make the final judgement. All right. The
:05:29. > :05:32.second big problem for Dilma Rousseff was that the Brazilian
:05:33. > :05:35.election watchdog has opened investigations into alleged illegal
:05:36. > :05:42.funding of her 2014 election campaign. Again, it is not for me to
:05:43. > :05:45.speak about something that is under Justice scrutiny, so to say. I
:05:46. > :05:50.cannot judge. I personally don't think there was anything irregular
:05:51. > :05:59.but I don't know, I wasn't involved in collecting money or anything like
:06:00. > :06:03.that. Sure. And I am sure she is a very honest woman. I have to say she
:06:04. > :06:09.denies any wrongdoing in any of the allegations, I'm going to make that
:06:10. > :06:11.clear. I firmly believe, and I think the Brazilian people firmly believe,
:06:12. > :06:15.they may not be happy with the situation as it is because nobody
:06:16. > :06:20.likes unemployment, nobody likes the risk of inflation in a recession,
:06:21. > :06:24.and these are true things that have to be tackled, but I don't think the
:06:25. > :06:29.other accusations will hold, honestly. You really don't? We have
:06:30. > :06:36.seen lots of public affection and protests from many venues. You have
:06:37. > :06:44.to see come of this is a Brazilian government, and it means 12 years in
:06:45. > :06:49.power of the Workers Party in Brazil which is geared towards social
:06:50. > :06:54.change. And especially to tackling the main problem of Brazil. You have
:06:55. > :06:57.been there, you know, it is any quality. And they did. And it
:06:58. > :07:08.creates a lot of resistance and reaction -- any quality. There is
:07:09. > :07:11.the oil scandal... Celso Amorim, thank you for raising that because
:07:12. > :07:20.that is the third scandal I was going to come to. They can't get her
:07:21. > :07:24.on the oil, so they try to get her in other areas and when they can't
:07:25. > :07:29.get that, it is not enough, they move onto something else. More than
:07:30. > :07:33.$2 billion in kickbacks is alleged that the state owned oil company,
:07:34. > :07:38.Petrobras. It is making headlines Petrobras. It is making headlines
:07:39. > :07:47.all over the place. Dozens of former executives and politicians from the
:07:48. > :07:53.Workers Party have been jailed. The press has been saying this. We have
:07:54. > :07:58.all been following this. But Dilma Rousseff was the energy minister
:07:59. > :08:11.from 2003 -2005 and therefore, she was not the chairperson -- she was
:08:12. > :08:13.the chairperson and presided over this mismanagement although she
:08:14. > :08:20.wasn't in charge, as you were saying. Lots of people don't know
:08:21. > :08:28.what happens below their level of policy decisions. I don't know how
:08:29. > :08:33.Petrobras works, I have never been. I don't know how they make their
:08:34. > :08:37.decisions, but I can be sure, because I know her personally, and I
:08:38. > :08:43.know how severe she is with any suspicion of anything wrong, not
:08:44. > :08:50.only a scandal like that but things that others might consider minor,
:08:51. > :08:55.she's very severe. But the fact is... It is regrettable, I have no
:08:56. > :08:57.doubt. But there are congressmen from many parties who are openly
:08:58. > :09:05.looking at the benefits of impeaching the president. I want to
:09:06. > :09:09.ask you very simply, do you believe she can survive? She says she won't
:09:10. > :09:14.resign, she said that in interview, can she survive? I'm sure she will
:09:15. > :09:19.survive. I'm sure she will, because the Brazilian institutions have to
:09:20. > :09:24.be preserved. She had a difficult election and there were many mutual
:09:25. > :09:32.allegations. But can she govern if there is a protracted and link the
:09:33. > :09:36.investigation process going on to impeach her? It is a big test but
:09:37. > :09:41.she is a courageous woman puppy as you know, she was tortured during
:09:42. > :09:48.the dictatorship and she was able to go on with her ideas and her fight
:09:49. > :09:51.for democracy and so on, so I believe in her power of resistance
:09:52. > :10:01.and I believe in her honesty. I don't work for her anymore and I am
:10:02. > :10:09.an independent now. But you were a member of the Workers Party. Yes.
:10:10. > :10:13.But I quit at the end of last president's rule because I didn't
:10:14. > :10:16.know what I was going to do. You are distancing yourself. You mention the
:10:17. > :10:19.people of Brazil and how Brazil itself is always synonymous with the
:10:20. > :10:27.huge gap between rich and poor with the worst levels of income disparity
:10:28. > :10:32.in the world. The Workers Party came in and said they wanted to be the
:10:33. > :10:40.voice of the poor. It has improved in Brazil, the inequality. The
:10:41. > :10:45.country had no growth but the only thing that increased was inequality
:10:46. > :10:48.and we change that. You are making it better and that is why the
:10:49. > :10:54.president before Dilma Rousseff was a popular one, and that is why she
:10:55. > :10:57.was elected in 2010 and then reelected in 2014 but the fact of
:10:58. > :11:01.the matter is the people who voted the party into power are now really
:11:02. > :11:05.unhappy. We've seen hundreds of thousands of people marching on the
:11:06. > :11:11.streets last year and this year. I will give you the example of Sao
:11:12. > :11:13.Paulo were 69-year-old woman was marching along saying she was
:11:14. > :11:17.worried about inflation, she said she was spending more than half of
:11:18. > :11:20.her retirement income in the supermarket purchasing food and now
:11:21. > :11:29.electricity. She said conditions of life had gone downhill. I don't know
:11:30. > :11:34.if they had gone downhill. She says it has. It is a hard time we're
:11:35. > :11:39.going through. I have no doubt about that. But I'm sure we will go out of
:11:40. > :11:42.that, I have no doubt of that and then we will have a country that is
:11:43. > :11:52.fairer and in which more people have opportunities. If you look even at
:11:53. > :12:00.the colour of people who complained when university funds are
:12:01. > :12:03.detained... Let me ask you about economics happy you say things will
:12:04. > :12:09.get better but people say Brazil is facing the worst recession since the
:12:10. > :12:21.1930s. Unemployment, 10% and rising. Inflation, about 7%. Sorry, it is
:12:22. > :12:29.the other way around. GDP is expected to shrink by nearly 3% this
:12:30. > :12:34.year. Junk status for credit ratings. The picture is very bleak.
:12:35. > :12:41.We're accustomed to difficulties and fighting through them. I think
:12:42. > :12:48.Brazil had three big problems and three big deficits. One with the
:12:49. > :12:51.democracy deficit. -- was the. The Justice Department is now working
:12:52. > :12:59.very clearly and very freely and these accusations are proof of
:13:00. > :13:02.that. We had economic stability which is now in a difficult
:13:03. > :13:07.situation but it is not what you used to have with an implement of 60
:13:08. > :13:14.-80% and that is how I grew up to the age of 60. I think it is under
:13:15. > :13:16.control it will getting control. Exports are already increasing
:13:17. > :13:21.because the exchange rate is becoming more realistic. I think we
:13:22. > :13:28.are suffering what people call the Dutch disease. The price of
:13:29. > :13:33.commodities are high and we wrongly believed, I agree, that that would
:13:34. > :13:38.last forever. So we are paying for that wishful thinking but I don't
:13:39. > :13:41.get will be a disaster. It is a more equal country, a country in which
:13:42. > :13:46.everyone can speak. Not only the rich but also the poor. I'm not
:13:47. > :13:50.distracting from some of the economic benefits that have
:13:51. > :13:54.accrued. But just looking at the hearing now and the future, the
:13:55. > :13:57.economic slowdown in China has meant that there is a weakened demand for
:13:58. > :14:04.Brazil's commodities and we know that. You are still very much an
:14:05. > :14:08.economy is based on commodities, as you say, unfortunately, so when you
:14:09. > :14:11.look at the government now and its expenditure is outpacing what it is
:14:12. > :14:19.getting in return and that is causing huge problems for the
:14:20. > :14:24.government. That is true. The focus of the government is precisely on
:14:25. > :14:26.that point and it sometimes creates further difficulties in the
:14:27. > :14:30.short-term because anywhere in the world when you have fiscal
:14:31. > :14:37.policies, and high interest rates, you could always discuss if they can
:14:38. > :14:42.be lower. If credit could become a little easier so that the economy
:14:43. > :14:45.will pick up. But anyway, these are difficult times. But you were
:14:46. > :14:55.looking at austerity measures? Are you doing what you have to do. She
:14:56. > :14:57.is. She is trying. She had this massive cabinet reshuffle and got
:14:58. > :15:03.her new finance minister who is contemplating tax increases. But his
:15:04. > :15:08.moves have been resisted by the president's own members of the party
:15:09. > :15:12.because they are saying they want to go in the opposite direction, they
:15:13. > :15:19.don't want austerity measures. They understand the need. When it comes
:15:20. > :15:24.to choosing what the expenditures to be cut are, it is important to keep
:15:25. > :15:35.the social programmes. That isn't essential aspect of the Workers
:15:36. > :15:38.Party -- is an. That is why they were elected. I'm not saying the
:15:39. > :15:43.previous governments did not have social programmes, they did, even
:15:44. > :15:48.the military government did, but it was the first government that put
:15:49. > :15:50.the priority in attacking these most important, shall I say, the plague
:15:51. > :16:06.of any quality in Brazil. But now the spillage outpaces
:16:07. > :16:11.revenue and Joaquim Levy is trying to do something about it. But there
:16:12. > :16:16.are influential voices in the Workers Party talking about reining
:16:17. > :16:21.in unemployment benefits. They say the government should not do this.
:16:22. > :16:26.It is playing with fire. There is always discussion about where
:16:27. > :16:31.pensions should be. It is very difficult to maintain... Again, I'm
:16:32. > :16:39.not an economist... But you have been a cabinet minister for 13
:16:40. > :16:41.years. We work in a different way. People did not meddle so much with
:16:42. > :16:45.foreign policy and I would not meddle with what other people were
:16:46. > :16:52.doing to such a large and, but I think that if there was a mistake,
:16:53. > :17:00.it was that there were too many tax cuts. They were taken in 2008 and
:17:01. > :17:08.2009 because that is the way to help the economy but I think that had to
:17:09. > :17:11.be corrected at some stage. And that is what is happening now and there
:17:12. > :17:19.is a great deal of pain, the very constituents of the Workers Party,
:17:20. > :17:21.to the extent that one consultant has said that President Dilma
:17:22. > :17:26.Rousseff has drifted away from her party's way of thinking. I don't
:17:27. > :17:31.know if he belongs to the Workers Party but... I did not say that he
:17:32. > :17:38.did. But why should he say that? He should speak about his own party. He
:17:39. > :17:42.is an analyst. But anyway, when you see people in big numbers, and I
:17:43. > :17:45.don't despise that, that is important, but they were
:17:46. > :17:49.middle-class people. They were mostly middle class and upper
:17:50. > :17:54.middle-class people. I also put it to you earlier on that even those
:17:55. > :17:57.people... They have been out on the streets. I don't deny that they were
:17:58. > :18:01.suffering but these people were expressing themselves in calling for
:18:02. > :18:06.her engagement, most of them, maybe not all, but most of them were
:18:07. > :18:09.middle-class. Really, I have to say to you on this point that we have
:18:10. > :18:12.seen banners being carried by people protesting in the streets saying
:18:13. > :18:17.that Brazilians are sick of corruption and Dilma Rousseff must
:18:18. > :18:25.go. Clean lethal. This is not the middle-class or the elite. I can
:18:26. > :18:28.tell you will stop I know them. You know all of these hundreds of
:18:29. > :18:34.thousands of protesters? You know every single one of them? I cannot
:18:35. > :18:39.count everyone but looking at the faces, the colour, you can say 80%
:18:40. > :18:48.are uppermiddle or middle-class. Given this, can result... And is
:18:49. > :18:52.serious stuff I don't deny. The middle-class still has to survive.
:18:53. > :18:59.Given us, can Brazil afford to host the Rio Olympics next year? I think
:19:00. > :19:03.that the Games will be a great occasion for people to go to
:19:04. > :19:10.Brazil. People are always sceptical about Brazil. When we had the World
:19:11. > :19:15.Cup... $11 billion! And they'll was that game with Germany. But on the
:19:16. > :19:21.other hand, the World Cup run smoothly. No violence at all.
:19:22. > :19:28.Nothing. But did it create lasting business? The idea was that it did
:19:29. > :19:32.not. It cost $11 billion it is a long-term thing. Is like foreign
:19:33. > :19:36.policy. When we started trading with India and China, people said the
:19:37. > :19:39.real markets where in Europe and the US and that we would not gain
:19:40. > :19:47.anything, but you have to look at the long wrong. This is not just did
:19:48. > :19:58.for that. You bring up our Brazil has relations with India and China.
:19:59. > :20:05.You are the first letter in the BRICS nations. But the second letter
:20:06. > :20:10.is Russia. The Russian Foreign Minister says that these five
:20:11. > :20:13.countries illustrate a multipolar system of international relations.
:20:14. > :20:19.Is that how you see it? That this is a vehicle for Brazil to project its
:20:20. > :20:21.world power? Among other things. Especially in the economic sphere,
:20:22. > :20:30.where the World Bank and IMF are based on rules which are totally
:20:31. > :20:35.based on the past. The old Western powers. Small European countries,
:20:36. > :20:40.really small European countries, have quotas that are bigger than
:20:41. > :20:45.India and Brazil. Voting powers that are bigger. You are talking about
:20:46. > :20:48.building. When President Bush called the G20 for the first time, they did
:20:49. > :20:56.not call those countries. Be called Brazil, India, Russia... You see it
:20:57. > :21:03.as a vehicle for a middle power like Brazil to project its global image?
:21:04. > :21:05.It is part of it, guess. But we have other things. We have South American
:21:06. > :21:11.integration, which is very important, of course. We keep peace
:21:12. > :21:16.with our neighbours. It seems like something given by God but it is
:21:17. > :21:21.not. It is kept by diplomacy and hard work. Are you that much of a
:21:22. > :21:24.regional player? Partly because you are Portuguese speaking and the rest
:21:25. > :21:30.of the Continental speaks Spanish, although I know the languages are
:21:31. > :21:35.similar, Brazil just seems... Diana speaks English and Suriname speaks
:21:36. > :21:38.Dutch. But Brazil seems to be insular. You don't trade very much
:21:39. > :21:43.because you are not a big trading nation with your neighbours...
:21:44. > :21:48.Brazil was a Connolly. Our old trade basically was the Europe and US. So
:21:49. > :21:55.you are not much of a regional force, really. Things have changed
:21:56. > :22:00.quite a lot, the pattern of trade. I believe that we are probably the
:22:01. > :22:05.biggest market for countries like Uruguay, Paraguay and Argentina
:22:06. > :22:08.after China. Maybe China has surpassed us but that is a different
:22:09. > :22:13.reason altogether and that is a big change. It is still of course our
:22:14. > :22:21.biggest trading partner from our point of view. They are still China,
:22:22. > :22:27.the US and Argentina. What about south-south cooperation. President
:22:28. > :22:40.Lula made a great point about local ties. The biggest African Diaspora,
:22:41. > :22:43.the biggest African population. But there we saw President Lula opening
:22:44. > :22:49.up embassies all over Africa and we saw trade between Africa and
:22:50. > :22:57.Brazilian trade to Africa went out to $28.5 billion in 2013. You do
:22:58. > :23:00.that but President Dilma Rousseff is now going around enclosing these
:23:01. > :23:05.embassies. No embassies have been closed. She is not as keen. I can
:23:06. > :23:08.only comment on the details of foreign policy or diplomacy because
:23:09. > :23:13.I have to respect what has been done by my successors. But I think
:23:14. > :23:16.President Lula was certainly more than extrovert in terms of
:23:17. > :23:19.international relations than President Dilma Rousseff but no
:23:20. > :23:26.embassies have been closed. We continue with the same policies.
:23:27. > :23:31.Just now, we're having a summit in South America with Arab countries,
:23:32. > :23:36.which was a creation of... She is not going to and do many of those
:23:37. > :23:42.foreign policy achievements? No. Of course I believe that quantity is
:23:43. > :23:48.always important but... And the US? Interests online? We have
:23:49. > :23:53.established a very good dialogue. We had too visit of President Bush to
:23:54. > :23:58.Brazil. And I met with Condoleezza Rice and Hillary Clinton. We had
:23:59. > :24:06.many disagreements but... You have rebuilt trust? It was never really
:24:07. > :24:11.at risk, that trust. We may have agreed or disagreed but we have
:24:12. > :24:16.respect from the US. Very quickly and briefly. Brazil with years of
:24:17. > :24:20.boom behind it is sinking to a new low? I think that you have to take a
:24:21. > :24:25.long-term line and the long-term line is a growing one and a rising
:24:26. > :24:30.one. Thank you for coming onto the programme. Thank you.