Lunch with the FT

September 24, 2010 5:01 pm

Lunch with the FT: Fernando Henrique Cardoso

Brazil’s philosopher king who is credited for putting the ‘B’ in Bric talks about the need for a new wave of reforms and his work with the Elders
Fernando Henrique Cardoso

The sun slanting through the open sash windows, the cool white blinds and tablecloths stirred by the gentle breeze, the whitewashed walls and the pale wooden floorboards make Carlota seem as though it might be in one of Brazil’s torrid, northern plantation provinces – or on some hilltop in the south of France. In fact, the restaurant is on the edge of Higienópolis, a hilly residential neighbourhood in bustling São Paulo, the largest metropolis in the Americas.

It is also the preferred local of Fernando Henrique Cardoso, the former Marxist intellectual colloquially known as FHC, who went on to slay hyperinflation and then twice became president of Brazil, from 1995 to 2002. Few people can claim to have been a philosopher king, let alone to have put the “B” in Bric – the now commonplace acronym, coined in 2001 by Goldman Sachs’ chief economist, that groups Brazil, Russia, India and China. And, although both the world and Brazil have fallen in love with FHC’s successor, President Luiz Inácio Lula da Silva, Cardoso is the man widely credited, at least abroad, with laying the foundations for a boom that has caught many off guard both by its speed and where it has come from.

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Lunch with the FT

I am a quarter of an hour early for lunch: São Paulo’s chaotic traffic is famously unpredictable. It is hard mentally to grasp a city of this size – the second biggest in the world, by some counts, with a greater urban population of about 20m. It is even harder to grasp the vastness of Brazil and the surrounding continent. I remembered a previous time I’d met Cardoso, in this same restaurant, when he had told me how, occasionally, he would exploit that vastness to get away from the strictures and stresses of being president. He’d board a single-engine water plane, be flown several hours over jungle treetops that looked like broccoli, and land at a remote fishing spot in an upper tributary of the Amazon. There he would wile away a couple of days in swimming shorts, meditatively gazing at the water with just a rod, his wife Ruth and a single security man for company.

“Once, after our boat had floated downstream for a few hours, I noticed the flash of binoculars in the tree canopy. After a while a patrol boat came up to us, with a Bolivian corporal in charge. I’d left Brazil without knowing it,” Cardoso recalled. “I asked the corporal to patch a message through to the president – I was good friends with the Bolivian president at the time. I left a message saying that I was sorry to have invaded his country, especially as I was only wearing underpants.”

Bang on time, Cardoso appears in the archway leading to our dining room. In a grey summer suit and blue shirt and tie, he is a slim man with walnut-coloured skin (as he once said, his ancestry has “one foot in the kitchen”, a reference to Brazilian slavery in the 19th century), and looks far younger than he should at nearly 80. He smiles when he sees me.

Although a senior senator for many years, Cardoso only properly emerged on the national scene in 1992 as one of a new breed of serious, well-intentioned Brazilian leaders. Back then, he became known in Brazil as the man who introduced the “real plan” – a package of economic reforms that stopped the country’s repeating cycle of boom and bust, and chronically high inflation (over the prior decade, inflation averaged 732 per cent a year). To the rest of the world, however, Cardoso was better known as a sociologist and the author of Dependency and Development (1969), a book that influenced a generation of Latin American thinkers while advocating economic policies that turned out to be the opposite of those that he successfully implemented while president.

I rise to let Cardoso into the corner seat. He jokes with the waiters that this way his back is covered but it also makes him visible and several times during the meal he exchanges greetings with other diners. The former president has been driven here today but often walks alone from his apartment two streets away. He declines an offer of wine – one glass an evening is his limit now, and he has given up his beloved whisky – and we ask for sparkling water and the menus. For a few minutes we chat about England and his time as a visiting professor at Clare College, Cambridge in the mid-1970s. “They’ve given me an honorary PhD now,” he says, with a self-deprecating smile, before adding: “I seem to get them from everywhere these days.” (He has more than 20, including honorifics from the universities of Oxford, London, Notre Dame, Rutgers, Jerusalem and Moscow.)

We discuss why Brazil should have developed an image in the eyes of the world as an exotic, lazy, tropical paradise, associated with football, carnival, samba – and not much else. “Because of slavery and because it was once a European monarchy in a tropical country, it was much easier for outsiders to stick to preconceived ideas than to do any analysis,” he says. But, by the 19th century, abetted by waves of immigration, Brazil already had a strong export sector. And by the 1940s, it had really taken off.

The big change came with the second world war when, after flirting with Nazi Germany, Brazil joined forces with the Allies. “Intellectually, Brazil had previously looked to France; economically, to Great Britain,” says Cardoso. “Now the focus moved to the United States.”

Along with the US investment Brazil secured in return for its support – CSN, the Brazilian steelmaker built with US money, is still going strong – the war delivered an automatic defence from imported goods. Brazil became a closed economy, withdrawing into itself in the same way that other big countries with huge land masses such as Russia and China have done.

The country’s postwar boom and industrialisation were led by powerful, centralised governments, at first civilian and democratic, and then, from the mid-1960s to mid-1980s, under military rule, until democracy was re-established in 1988.

Under democracy, Cardoso says, fingering the menu, it was no longer possible to ignore the demands of Brazil’s growing population. “Under the military in the 1970s, growth was seven per cent a year,” he says. “But education, health, infant mortality were all getting worse. Under democracy, you have to meet those needs.”

By now the waiters are getting impatient for our order. I’m disappointed he doesn’t want a starter – one of Carlota’s specialities is a selection of wonderful appetisers but it is for two people, so I pass. Cardoso orders ravioli de gruyere, while I choose grilled lamb fillets with ratatouille and goat’s cheese agnolotti.

But the transition to democracy, he says, was chaotic, and culminated in a world-class bout of hyperinflation in 1990, which “only strengthened outsiders’ preconceived ideas: as well as being exotic, Brazil was not a serious country”.

Then Cardoso describes in a low voice, almost as an aside, his emergence as a policymaker. After Itmar Franco became president in 1992, “I [as finance minister] managed to secure inflation and we began the reform of the state. From then, all the social indicators began to improve, sometimes by more or less, and improvement has accelerated under Lula, but the beginning was there ... Anyway, from then on Brazil began to believe more in itself.”

This is the Brazil that the world has come to know recently. It is a country of soccer and samba and an immensely charming president (“I love this guy,” as Barack Obama once said of Lula: “he’s the most popular politician on earth”). It is also a country of giant companies such as JBS, the world’s biggest meat producer, and Petrobras, which this week launched the globe’s largest ever share issue, worth almost $70bn, to exploit oil reserves that are larger even than those of Kuwait or Russia.

We pause for the arrival of our food. Cardoso says his ravioli is good. My lamb, though, is a bit disappointing.

So now that Brazil has found self-belief, what next, I ask.

“The big thing is quality,” he begins. “We’ve spent all our lives worrying about quantity – whether GDP grows or not. Now the question is quality. What kind of education is this? The main reason children skip school is no longer economic. It’s because they’ve lost interest. There’s no point. The quality of teaching is awful.

“We need a new wave of reforms,” Cardoso continues. “How will we increase productivity to compete? That means fiscal reform, lower taxes, investment in human capital and infrastructure.”

To many, this is known as “the Brazil cost” – the challenge of getting things done in a country where the state is so inefficient that Brazil ranks only 129th out of 183 countries in the World Bank’s annual “Doing Business” survey. I ask why there appears to be no popular appeal for reforms that might change this. “During my time there was popular appeal. There was a lot of discussion,” he replies.

There was indeed. Flexibilisation was the word in the late 1990s, when monopolies were broken, large sectors of the economy privatised, the banking sector was recapitalised and other reforms begun, such as of state pensions.

“The discussion stopped,” FHC continues. “In a way, Lula has anaesthetised Brazil. We have forgotten that Brazil needs to keep advancing. What I managed to do moved the country forward. But then it stopped. Just stopped.”

Cardoso starts to talk about the election on October 3. But when he mentions his own party, frustration enters his voice for the first time. “The opposition got it wrong. We allowed the mythification of Lula. But Lula is no revolutionary. He rose from the working class and behaves as if he’s part of the old conservative elite.”

I suggest we already know who will win the election, still three and a half weeks away at our lunch. “Yes,” he admits – Dilma Rousseff, Lula’s anointed candidate from his Workers Party. (Lula himself is outlawed from running for a third consecutive term, otherwise he would walk it.)

What will that mean for Brazil? “It will prevent us from developing more quickly. But it won’t take Brazil backwards. Society is too strong for that.”

If so, I ask, why do Brazilians complain so little, given rising crime, high violence, and persistent inequality? Cardoso thinks this is changing.

He describes field trips as a sociologist he once made into favelas and factories, when the poor would step aside out of respect for the men in suits and ties. “Not today,” he says. “People used to be afraid even to talk to you. Not now. There’s a bad side, of course, in the violence, but there’s a good side too. They’re thinking, what is this guy doing here, who doesn’t belong? They’re not submissive any more.”

Our puddings arrive: guava soufflé with cream-cheese sauce, a Carlota speciality and absolutely delicious. Cardoso’s driver is hovering in the archway, worried he will be late for his next appointment. But FHC is in no hurry and we order coffee. He talks about his packed schedule – this is his third meeting of the day and he has one an hour for the rest of the afternoon – but when I suggest retirement he laughs and says that’s not possible, though he would like to slow down a little.

He talks about his work with the Latin American Commission on Drugs and Democracy and with the Elders, a group of statesmen and women assembled by Nelson Mandela to tackle some of the world’s problems. “You can’t imagine the amount of work involved,” he says. “Jimmy Carter [one of the group] has a physical and mental stubbornness you wouldn’t believe.” Over coffee we chat about his friendship of many years with Bill Clinton, and he tells me he is also friends with Richard Branson (“very intelligent, and totally crazy. Looks like a Viking and wants to go to the moon”) and Peter Gabriel (“he’s the more intelligent – full of ideas and messages”). Bill Gates, introduced to him by Clinton, FHC reports sadly, is “not a sympathetic man. The others are, very. But he’s not.”

As we prepare to leave, I ask Cardoso what he thinks history will make of Lula? “I think he will be remembered for growth and continuity, and for putting more emphasis on social spending. He’s a Lech Walesa who worked out.”

And of his own importance? “I did the reforms. Lula surfed the wave.”

Jonathan Wheatley is the FT’s Brazil correspondent

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Carlota

Rua Sergipe, 753, Higienópolis, São Paulo

Cover charge x 2 R$22

Lamb fillets with ratatouille and goat’s cheese agnolotti R$51

Ravioli de gruyere R$42

Guava soufflé with cream-cheese sauce x 2 R$36

Espresso x 2 R$8

Sparkling water x 4 R$16

Total (including service) R$193 (£72)

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