The Central Bank exercises the function of monetary authority acting in the elaboration and management of monetary and exchange policies, in the regulation and supervision of the financial system and in the management of the payment system and the currency. Its commitment is to “ensure the stability of the currency’s purchasing power and the solidity of the national financial system”.
Those who advocate for the independence of the Central Bank in relation to the elected government hope that the Central Bank, based on strictly technical criteria and the instruments at its disposal, will contain the tendencies of governments and parliaments to increase public spending and the consequent issuance of coins.
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There are two serious problems with the thesis. The first is that the president of the Central Bank, who was not elected by anyone, becomes a super-minister, in some cases possessing powers greater than parliament, the finance minister and the president of the republic, since he commands monetary policy, interest rates and foreign debt negotiations. Acting in disarray with the economic policy of the executive branch, the president of the Central Bank has the power to make the government unfeasible.
The second misconception is that of imagining that the so-called superminister, president of the Central Bank, would decide according to “strictly technical criteria”. Such a conception, positivist in its origin, assumes the existence of techniques unrelated to theories and political ideologies. But theories, like political ideologies, are worldviews; they are ways of seeing, understanding and interfering with reality, and they are the sources from which techniques are born.
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So, just like any other human being who makes his daily decisions based on his convictions, when the president of the Central Bank decides on one or another exchange rate or financial policy, his analysis and choice departed from the theoretical and ideological paradigms that guide him .
Roberto Campos Neto, current president of the Central Bank of Brazil was appointed by former president Jair Bolsonaro and will remain in the presidency of the BC until December 31, 2024. He is the first president of the independent BC, and, in theory, his term will not may be revoked by the new president, in this case, Lula.
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Superminister Campos Neto, economically speaking, is a defender of neoliberalism, which is an ideology that propagates the idea that the State should have the least influence on economic factors, which would leave the market with maximum freedom. Thus, the State should refrain from, for example, regulating the minimum wage, and the value of such wages should vary according to supply and demand, that is, the market.
Well, the BC president’s economic thinking is exactly the opposite of what the elected government defends. Unlike the neoliberals, the Lula government believes that the State should regulate and induce economic activity, promote employment and income, and also promote a less unequal distribution of national wealth. Even if he acted technically, the BC president’s economic theory puts him in collision with the executive’s economic policy.
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Was BC wrong or manipulated to favor Bolsonaro?
In addition to acting against the Lula government, Campos Neto also keeps in his resume his approach to Bolsonarist ideological extremism, which also disqualifies any argument that suggests technical neutrality on his part. Incidentally, it is very difficult to believe in a “technical” president of the Central Bank who had to make a fool of himself by informing society that the Bank had seriously “error” its statistics on the exchange rate flow of the Brazilian economy in 2021 and 2022.
The exchange flow measures the dollars that enter and leave the country in foreign trade operations, investments or even for the purchase and sale of reserves. The agency reported a (positive) inflow balance of US$ 9.5 billion into the country in 2022. After reviewing the data, the BC verified a negative capital flow balance of US$ 3.2 billion, on a smaller scale, the same “mistake” occurred in 2021.
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Considering that super-minister Campos Neto should act technically and independently of the government that appointed him, in the case of Bolsonaro, it is suspected that there was no “error” in the calculations. The numbers are too large for errors, what happened was a deliberate action to disguise economic results to favor the election of the one who led Campos Neto to vote wearing the Brazilian National Team shirt. If it was an error, due to the volume, we would have reason to prevent it.
BC president is a Bolsonarist
Campos Neto’s ideological commitment to the Bolsonarist sect is profound. The fact that the Central Bank, under his presidency, ignored the access to information law and bought 129 tons of gold, places him at the center of the crisis of illegal gold mining in Yanomami lands.
His situation became even more unsustainable at the post when Campos Neto’s cell phone was photographed open precisely in the conversation of the WhatsApp group entitled “Bolsonaro’s Ministers”. This on January 11, 2023, just 3 days after some of the other ministers present in that group, such as Anderson Torres, for example, were accused of promoting and facilitating terrorist acts in Brasilia on January 8.
Just as the proposal to suspend for two years the salary adjustments of civil servants was a “grenade” placed by the government “in the pocket of the enemy”, as Paulo Guedes stated, the independence of the Central Bank imposed on Brazilians was a bomb installed to implode the Lula’s government. And, Campos Neto is just an avatar of the defeated government tasked with activating the detonator.
* Dimas Antonio de Souza Professor of Political Science at the Institute of Social Sciences at the Pontifical Catholic University of Minas Gerais (PUC Minas).
** This is an opinion article and the author’s views do not necessarily express the editorial line of the newspaper.
Source: BdF Minas Gerais
Editing: Elis Almeida
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