Keep Us Strong WikiLeaks logo

Currently released so far... 97115 / 251,287

Articles

Browse latest releases

Browse by creation date

Browse by origin

A B C D F G H I J K L M N O P Q R S T U V W Y Z

Browse by tag

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
ETRD EAGR ETTC EAID ECON EFIN ECIN EINV ELAB EAIR ENRG EPET EWWT ECPS EIND EMIN ELTN EC ETMIN EUC EZ ET ELECTIONS ENVR EU EUN EG EINT ER ECONOMICS ES EMS ENIV EEB EN ECE ECOSOC EK ENVIRONMENT EFIS EI EWT ENGRD ECPSN EXIM EIAD ERIN ECPC EDEV ENGY ECTRD EPA ESTH ECCT EINVECON ENGR ERTD EUR EAP EWWC ELTD EL EXIMOPIC EXTERNAL ETRDEC ESCAP ECO EGAD ELNT ECONOMIC ENV ETRN EIAR EUMEM ENRGPARMOTRASENVKGHGPGOVECONTSPLEAID EREL ECOM ECONETRDEAGRJA ETCC ETRG ECONOMY EMED ETR ENERG EITC EFINOECD EURM EENG ERA EXPORT ENRD ECONEINVETRDEFINELABETRDKTDBPGOVOPIC EGEN EBRD EVIN ETRAD ECOWAS EFTA ECONETRDBESPAR EGOVSY EPIN EID ECONENRG EDRC ESENV ETT EB ENER ELTNSNAR ECHEVARRIA ETRC EPIT EDUC ESA EFI ENRGY ESCI EE EAIDXMXAXBXFFR EETC ECIP EIAID EIVN EBEXP ESTN EING EGOV ETRA EPETEIND ELAN ETRDGK EAIDRW ETRDEINVECINPGOVCS EPEC ENVI ELN EAG EPCS EPRT EPTED ETRB EUM EAIDS EFIC EFINECONEAIDUNGAGM EAIDAR ESF EIDN ELAM EDU EV EAIDAF ECN EDA EXBS EINTECPS ENRGTRGYETRDBEXPBTIOSZ EPREL EAC EINVEFIN ETA EAGER EINDIR ECA ECLAC ELAP EITI EUCOM ECONEFINETRDPGOVEAGRPTERKTFNKCRMEAID EARG ELDIN EINVKSCA ENNP EFINECONCS EFINTS ECCP ETC EAIRASECCASCID EINN ETRP EAIDNI EFQ ECOQKPKO EGPHUM EBUD ECONEINVEFINPGOVIZ ENERGY ELB EINDETRD EMI ECONEFIN EIB EURN ETRDEINVTINTCS EIN EFIM ETIO ELAINE EMN EATO EWTR EIPR EINVETC ETTD ETDR EIQ ECONCS EPPD ENRGIZ EISL ESPINOSA ELEC EAIG ESLCO EUREM ENTG ERD EINVECONSENVCSJA EEPET EUNCH ECINECONCS ETRO ETRDECONWTOCS ECUN EFND EPECO EAIRECONRP ERGR ETRDPGOV ECPN ENRGMO EPWR EET EAIS EAGRE EDUARDO EAGRRP EAIDPHUMPRELUG EICN ECONQH EVN EGHG ELBR EINF EAIDHO EENV ETEX ERNG ED
KMDR KPAO KPKO KJUS KCRM KGHG KFRD KWMN KDEM KTFN KHIV KGIC KIDE KSCA KNNP KHUM KIPR KSUM KISL KIRF KCOR KRCM KPAL KWBG KN KS KOMC KSEP KFLU KPWR KTIA KSEO KMPI KHLS KICC KSTH KMCA KVPR KPRM KE KU KZ KFLO KSAF KTIP KTEX KBCT KOCI KOLY KOR KAWC KACT KUNR KTDB KSTC KLIG KSKN KNN KCFE KCIP KGHA KHDP KPOW KUNC KDRL KV KPREL KCRS KPOL KRVC KRIM KGIT KWIR KT KIRC KOMO KRFD KUWAIT KG KFIN KSCI KTFIN KFTN KGOV KPRV KSAC KGIV KCRIM KPIR KSOC KBIO KW KGLB KMWN KPO KFSC KSEAO KSTCPL KSI KPRP KREC KFPC KUNH KCSA KMRS KNDP KR KICCPUR KPPAO KCSY KTBT KCIS KNEP KFRDCVISCMGTCASCKOCIASECPHUMSMIGEG KNNB KGCC KINR KPOP KMFO KENV KNAR KVIR KDRG KDMR KFCE KNAO KDEN KGCN KICA KIMMITT KMCC KLFU KMSG KSEC KUM KCUL KMNP KSMT KCOM KOMCSG KSPR KPMI KRAD KIND KCRP KAUST KWAWC KTER KCHG KRDP KPAS KITA KTSC KPAOPREL KWGB KIRP KJUST KMIG KLAB KTFR KSEI KSTT KAPO KSTS KLSO KWNN KPOA KHSA KNPP KPAONZ KBTS KWWW KY KJRE KPAOKMDRKE KCRCM KSCS KWMNCI KESO KWUN KPLS KIIP KEDEM KPAOY KRIF KGICKS KREF KTRD KFRDSOCIRO KTAO KJU KWMNPHUMPRELKPAOZW KEN KO KNEI KEMR KKIV KEAI KWAC KRCIM KWCI KFIU KWIC KCORR KOMS KNNO KPAI KBWG KTTB KTBD KTIALG KILS KFEM KTDM KESS KNUC KPA KOMCCO KCEM KRCS KWBGSY KNPPIS KNNPMNUC KWN KERG KLTN KALM KCCP KSUMPHUM KREL KGH KLIP KTLA KAWK KWMM KVRP KVRC KAID KSLG KDEMK KX KIF KNPR KCFC KFTFN KTFM KPDD KCERS KMOC KDEMAF KMEPI KEMS KDRM KEPREL KBTR KEDU KNP KIRL KNNR KMPT KISLPINR KTPN KA KJUSTH KPIN KDEV KTDD KAKA KFRP KWNM KTSD KINL KJUSKUNR KWWMN KECF KWBC KPRO KVBL KOM KFRDKIRFCVISCMGTKOCIASECPHUMSMIGEG KEDM KFLD KLPM KRGY KNNF KICR KIFR KM KWMNCS KAWS KLAP KPAK KDDG KCGC KID KNSD KMPF KPFO KDP KCMR KRMS KNPT KNNNP KTIAPARM KDTB KNUP KPGOV KNAP KNNC KUK KSRE KREISLER KIVP KQ KTIAEUN KPALAOIS KRM KISLAO KWM KFLOA
PHUM PINR PTER PGOV PREL PREF PL PM PHSA PE PARM PINS PK PUNE PO PALESTINIAN PU PBTS PROP PTBS POL POLI PA PGOVZI POLMIL POLITICAL PARTIES POLM PD POLITICS POLICY PAS PMIL PINT PNAT PV PKO PPOL PERSONS PING PBIO PH PETR PARMS PRES PCON PETERS PRELBR PT PLAB PP PAK PDEM PKPA PSOCI PF PLO PTERM PJUS PSOE PELOSI PROPERTY PGOVPREL PARP PRL PNIR PHUMKPAL PG PREZ PGIC PBOV PAO PKK PROV PHSAK PHUMPREL PROTECTION PGOVBL PSI PRELPK PGOVENRG PUM PRELKPKO PATTY PSOC PRIVATIZATION PRELSP PGOVEAIDUKNOSWGMHUCANLLHFRSPITNZ PMIG PREC PAIGH PROG PSHA PARK PETER POG PHUS PPREL PS PTERPREL PRELPGOV POV PKPO PGOVECON POUS PGOVPRELPHUMPREFSMIGELABEAIDKCRMKWMN PWBG PMAR PREM PAR PNR PRELPGOVEAIDECONEINVBEXPSCULOIIPBTIO PARMIR PGOVGM PHUH PARTM PN PRE PTE PY POLUN PPEL PDOV PGOVSOCI PIRF PGOVPM PBST PRELEVU PGOR PBTSRU PRM PRELKPAOIZ PGVO PERL PGOC PAGR PMIN PHUMR PVIP PPD PGV PRAM PINL PKPAL PTERE PGOF PINO PHAS PODC PRHUM PHUMA PREO PPA PEPFAR PGO PRGOV PAC PRESL PORG PKFK PEPR PRELP PREFA PNG PGOVPHUMKPAO PRELECON PINOCHET PFOR PGOVLO PHUMBA PRELC PREK PHUME PHJM POLINT PGOVPZ PGOVKCRM PGOVE PHALANAGE PARTY PECON PEACE PROCESS PLN PRELSW PAHO PEDRO PRELA PASS PPAO PGPV PNUM PCUL PGGV PSA PGOVSMIGKCRMKWMNPHUMCVISKFRDCA PGIV PRFE POGOV PEL PBT PAMQ PINF PSEPC POSTS PHUMPGOV PVOV PHSAPREL PROLIFERATION PENA PRELTBIOBA PIN PRELL PGOVPTER PHAM PHYTRP PTEL PTERPGOV PHARM PROTESTS PRELAF PKBL PRELKPAO PKNP PARMP PHUML PFOV PERM PUOS PRELGOV PHUMPTER PARAGRAPH PERURENA PBTSEWWT PCI PETROL PINSO PINSCE PQL PEREZ PBS

Browse by classification

Community resources

courage is contagious

Viewing cable 05BRASILIA2477, THE BRAZILIAN MACRO-ECONOMY: SOARING HIGH BUT NO

If you are new to these pages, please read an introduction on the structure of a cable as well as how to discuss them with others. See also the FAQs

Understanding cables
Every cable message consists of three parts:
  • The top box shows each cables unique reference number, when and by whom it originally was sent, and what its initial classification was.
  • The middle box contains the header information that is associated with the cable. It includes information about the receiver(s) as well as a general subject.
  • The bottom box presents the body of the cable. The opening can contain a more specific subject, references to other cables (browse by origin to find them) or additional comment. This is followed by the main contents of the cable: a summary, a collection of specific topics and a comment section.
To understand the justification used for the classification of each cable, please use this WikiSource article as reference.

Discussing cables
If you find meaningful or important information in a cable, please link directly to its unique reference number. Linking to a specific paragraph in the body of a cable is also possible by copying the appropriate link (to be found at theparagraph symbol). Please mark messages for social networking services like Twitter with the hash tags #cablegate and a hash containing the reference ID e.g. #05BRASILIA2477.
Reference ID Created Released Classification Origin
05BRASILIA2477 2005-09-20 13:41 2011-07-11 00:00 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Brasilia
This record is a partial extract of the original cable. The full text of the original cable is not available.

201341Z Sep 05
UNCLAS SECTION 01 OF 02 BRASILIA 002477 
 
SIPDIS 
 
NSC FOR CRONIN 
TREASURY FOR OASIA - DAS LEE AND FPARODI 
STATE PASS TO FED BOARD OF GOVERNORS FOR ROBITAILLE 
USDOC FOR 4332/ITA/MAC/WH/OLAC/JANDERSEN/ADRISCOLL/MWAR D 
USDOC FOR 3134/ITA/USCS/OIO/WH/RD/DDEVITO/DANDERSON/EOL SON 
AID/W FOR LAC/SA 
 
SENSITIVE 
 
E.O. 12958: N/A 
TAGS: ECON PGOV EFIN
SUBJECT:  THE BRAZILIAN MACRO-ECONOMY: SOARING HIGH BUT NO 
NETS BELOW 
 
REF: A) Brasilia 2242, B) Brasilia 2467 
 
1. (SBU) Summary.  The past 30 days have seen a wealth of 
good news for the Brazilian economy as a number of fiscal, 
growth, and financial indicators are trending up.  Given 
this positive turn of events, some market watchers are 
beginning to wonder whether the conventional wisdom is 
correct - i.e., that direct involvement by the President or 
Finance Minister Palocci in the ongoing political scandal 
are key economic tripwires.  Without doubt, investors are 
correct in rewarding Brazil for establishing solid economic 
fundamentals.  But while we would like to sign on to the 
emerging theory that the economy is immune from political 
contamination, for now our preference is to wait and see 
where (and to whom) the scandal leads.  End Summary. 
 
2. (U) Notwithstanding the ongoing political scandal, the 
Brazilian economy is racking up some remarkable 
achievements.  Last week the Sao Paulo Stock Exchange 
(BOVESPA) hit another record high and is up 13.82 percent 
for the year.  The Finance Ministry has just successfully 
issued US$750 million in real-denominated Eurobonds (10 year 
maturity/13.8 percent annual interest rate).  Meanwhile, for 
dollar-denominated issuances, Brazil risk has fallen to its 
lowest level since 1997:  369 basis points.  The real has 
continued to strengthen against the dollar, with the 
dollar/real exchange rate dropping from 2.46 three months 
ago to 2.29 as of September 16).  Seasonally-adjusted 2d 
quarter GDP growth figures registered a healthy 3.7 percent 
increase over last year, up from 3.3 percent in the first 
quarter.  After a surge of inflation in the first semester, 
recent months of deflation have market watchers predicting 
the yearly total will come in at 5.2 percent - a hair over 
the government's 5.1 percent target.  Analysts forecast a 
2005 trade surplus of US$40.5 billion, up from US$32 billion 
in 2004.  And a recent UNCTAD study, ranked Brazil in fifth 
place as the preferred destination for multinational 
investment for 2005/2006, after China, India, the United 
States and Russia. 
 
3. (SBU) All this comes against the backdrop of a raging 
political scandal, which since it first erupted in May, has 
seen much of President Lula's inner circle resign, a massive 
loss of faith in the credibility of both Lula as well as the 
governing PT party, and the imminent demise of the 
controversial President of the Chamber of Deputies - 
Severino Cavalcanti.  To date, both foreign investors and 
domestic market watchers have coalesced around the argument 
that two scenarios might lead the ongoing political 
instability to infect the economy:  i.e., the replacement of 
Lula (via resignation, impeachment or electoral defeat) with 
a populist figure, or the departure of Finance Minister 
Palocci from the government.  Indeed, in late August when 
allegations of corruption touched Palocci, the dollar spiked 
and the BOVESPA fell.  Ref A.  However, Palocci's spirited 
denials, combined with the lack of documentary evidence to 
support the contract-skimming charges, ended up settling the 
markets and restoring public trust in his economic 
stewardship. 
 
4. (SBU) Over the past few weeks, a new theory has begun to 
emerge contending that the Brazilian economy is immune from 
scandal-related political contamination.  Most prominently 
enunciated in the September 14 edition of the leading 
newsweekly magazine Veja, this theory holds that the eleven 
years of responsible economic management since the 
initiation of the Plano Real in 1994 has institutionalized 
sound economic policies.  A continual reform process has 
opened up the economy and limited the ability of both the 
federal and state governments to spend beyond their limits. 
According to this line of argument, neither the public nor 
officials within the federal bureaucracy would brook a 
return to populist policies - given all the advances that 
have taken place during the 1994 to 2002 Fernando Henrique 
Cardoso administration and the first three years of the Lula 
administration.  Sound economic policies, in other words, 
now have a powerful constituency. 
 
5. (SBU) Palocci himself was one of the first to give voice 
to these sentiments.  During his late August press 
conference rebutting the allegations against him, he 
repeatedly declared that the health of the Brazilian economy 
does not depend upon his presence at the Ministry.  "No one 
is irreplaceable," he emphasized.  For his part, in remarks 
to foreign investors at a September 15 breakfast in New 
York, Lula made a similar point.  He stated that the ongoing 
investigations into political corruption would continue on 
their course and would not affect the economy.  Meanwhile, a 
number of market analysts, both foreign and domestic, are 
now openly wondering whether the political crisis will ever 
seep into the economy.  In September, the market shrugged 
off two separate allegations against Palocci and his 
brother, one involving property held by the Minister (which 
was supposed undervalued for tax purposes) and the other 
involving possible influence-peddling by the Minister's 
brother.  Ref B. 
 
6. (SBU) Comment.  While we agree that now more than ever 
acceptance of sound economic policies is entrenched among 
the Brazilian governing classes, we do not believe that this 
necessarily means that the debate over the country's future 
macroeconomic path is over.  First, while most here do not 
espouse the platform of the unrepentant left (i.e., 
restrictions on capital flows, price controls, unrestrained 
government spending), there are those here who still support 
these discredited recipes of the past.  Second, the reason 
that prudent policies have reigned over the past 11 years is 
because responsible political leaders have made it so. 
Should Lula (or his successor) abruptly decide to take a 
different approach, then all bets are off. 
 
7. (SBU) While the odds of an economic populist gaining the 
presidency are modest, given the current environment they 
cannot be discounted - and certainly are greater now than 
they were four months ago before the scandal erupted.   No 
one knows where the mushrooming scandal will lead or whom it 
might touch.  Should voters decide that conventional-style 
politicians have made a mess of things, they could well turn 
towards more populist figures.  Right now, the 
political/economic orthodoxy that will emerge after the dust 
settles is anyone's guess.  Like a bucking bronco, we'll all 
need to wait and see where this horse goes. 
 
CHICOLA