RESOURCES, BRAZIL'S ECONOMY HAS

BEEN ON A ROLL.

[ INDISTINCT CHANTING ]

BUT THE GOOD TIMES ARE OVER...

AT LEAST FOR NOW.

THE OUTLOOK NEXT ON

"GLOBAL PERSPECTIVES."

>> THIS IS

"GLOBAL PERSPECTIVES," WITH

PULITZER PRIZE-WINNING

COMMENTATOR JOHN BERSIA.

>> WELCOME TO

"GLOBAL PERSPECTIVES."

BRAZILIANS ARE A MAJOR FACTOR IN

CENTRAL FLORIDA'S ECONOMY.

BUT THE ECONOMIC ENGINE AT HOME

THAT HAS FUNDED THEIR UPPER- AND

MIDDLE-CLASS TRAVELING WAYS MAY

BE STARTING TO SPUTTER.

BY EXPLOITING NATURAL

RESOURCES, EXPANDING

AGRICULTURAL EXPORTS, AND

ATTEMPTING ENERGY

SELF-SUFFICIENCY, BRAZIL HAS

DEVELOPED ONE OF THE LARGEST

ECONOMIES IN THE WORLD AND THE

LARGEST IN SOUTH AMERICA.

BUT THE RISING TIDE HAS NOT

RAISED ALL BOATS.

AND LAST SUMMER, ANGER OVER

LAGGING INFRASTRUCTURE,

CORRUPTION, AND THE BILLIONS

BEING SPENT ON NEW SOCCER AND

OLYMPIC FACILITIES BROUGHT

PROTESTORS -- MANY OF THEM FROM

THE NEW MIDDLE CLASS -- INTO THE

STREETS.

OUR GUEST TODAY,

MYLES FRECHETTE, IS A FORMER

U.S. AMBASSADOR TO COLOMBIA, WHO

HAS SERVED IN VARIOUS DIPLOMATIC

POSTS THROUGHOUT THE REGION FOR

SEVERAL DECADES AND IS UNIQUELY

SUITED TO ANALYZE THESE

DEVELOPMENTS AND WHAT THEY MEAN

FOR THE UNITED STATES.

WELCOME TO THE SHOW,

AMBASSADOR FRECHETTE.

>> THANK YOU VERY MUCH, JOHN.

PLEASURE TO BE HERE.

>> SO, WHAT IS THE SITUATION

WITH BRAZIL?

IS THE WHOLE RISING POWER

ENVIRONMENT FOR BRAZIL OVER?

ARE WE SEEING A CRASH COMING?

OR IS THIS JUST ONE OF THOSE

THINGS THAT RISING POWERS GO

THROUGH AS THEY MAKE THEIR WAY

THROUGH THE WORLD?

>> WELL, I DON'T THINK IT'S THE

LATTER.

I DO THINK THAT MANY OF THE

THINGS THAT WE'RE SEEING IN

BRAZIL TODAY AND ARE BEING

CRITICIZED ABOUT THE ECONOMY IN

BRAZIL, HAVE EXISTED FOR A VERY

LONG TIME.

BUT BRAZIL HAS HAD, FOR EXAMPLE,

IN THE LAST FEW YEARS, A

TREMENDOUS SURGE IN THE SALE OF

COMMODITIES.

THEY'VE BEEN MAKING MONEY HAND

OVER FIST.

AND IT DIDN'T MATTER THAT MUCH.

HOWEVER, NOW THERE IS A ROUGH

PATCH.

NO QUESTION ABOUT IT.

BRAZIL CANNOT LIVE OFF SIMPLY

MORE EMPLOYMENT.

IT HAS TO BECOME MORE

PRODUCTIVE.

HOW DO YOU BECOME MORE

PRODUCTIVE?

BETTER EDUCATION SO THAT, YOU

KNOW, MORE BRAZILIANS CAN OCCUPY

JOBS IN THE NEW SECTORS BEING

OPENED UP.

BETTER INFRASTRUCTURE SO THAT

EVERYTHING IN BRAZIL WORKS

BETTER, FROM THE TRAINS TO THE

PLANES TO THE TRUCKS.

LOWER COSTS AND TAXES SO THAT

BRAZILIANS DON'T PAY EXORBITANT

PRICES FOR THINGS THAT THEY

WOULD LIKE IS ONE OF THE

REASONS, AS YOU MENTIONED IN

YOUR LEAD-IN, THAT BRAZILIANS

COME TO THE UNITED STATES SO

THEY CAN BUY AN AWFUL LOT OF

STUFF AT LOWER PRICE THAN THEY

CAN GET IN BRAZIL.

AND SO, YOU KNOW, ALL OF THESE

THINGS PUT TOGETHER ARE GONNA

MAKE FOR A NEW, MORE POWERFUL

BRAZIL.

BUT IT ALSO MEANS A BREAK IN THE

ECONOMIC MODEL.

UP TO NOW, THE GOVERNMENT HAS --

PARTICULARLY THIS GOVERNMENT,

THE WORKER'S PARTY -- HAS RELIED

VERY MUCH ON THE GOVERNMENT AND

ONLY GRUDGINGLY ALLOWS THE

PRIVATE SECTOR IN.

AND THAT'S GONNA HAVE TO CHANGE.

ANOTHER THING THAT'S LACKING IN

BRAZIL'S THE KIND OF DIALOGUE

THAT EXISTS IN THE UNITED STATES

BETWEEN THE PRIVATE SECTOR AND

THE GOVERNMENT.

AND THERE IS, FRANKLY, MORE

LISTENING ON BOTH SIDES HERE

THAN THERE IS IN BRAZIL.

WHEN I SERVED IN BRAZIL IN

SAO PAULO, I REMEMBER MEETING

WITH MANY, MANY BUSINESSMEN

BECAUSE SAO PAULO IS THE

INDUSTRIAL ENGINE, IF YOU WILL,

OF BRAZIL.

AND THEY SAID, "OH, THEIR

POLICIES ARE WRONG, AND LOOK, WE

OUGHT TO BE DOING THIS AND THAT

AND THE OTHER THING."

AND I SAID, "WELL, WHY DON'T YOU

GO TO BRASíLIA AND TELL THEM

THAT?"

AND THEY SAID, "WELL, IT JUST

DOESN'T WORK THAT WAY."

THEY NEVER WENT INTO AN AWFUL

LOT OF DETAIL.

BUT THAT HAPPENS TO BE THE

REALITY.

SO THEY'VE GOT TO DO ALL OF

THESE THINGS TOGETHER.

IT'S GONNA COST A LOT OF MONEY.

IT'S GONNA TAKE TIME.

THIS IS NOT SOMETHING, YOU KNOW,

LIKE A LIGHT BULB -- YOU TURN IT

ON.

THE VERY THING THAT YOU WERE

TALKING ABOUT EARLIER -- THE

LACK OF INFRASTRUCTURE, THE

ANGER AMONG THE PEOPLE FOR ALL

THE SOCCER STADIUMS THERE BEING

BUILT, COSTING BILLIONS OF

DOLLARS WHEN THEY DON'T HAVE

PROPER ROADS TO DRIVE THEIR CARS

ON.

>> TALK TO US ABOUT THOSE

BRAZILIAN TOURISTS.

IF THE ECONOMY SPUTTERS, WILL WE

SEE A DECREASE IN THOSE

TOURISTS?

OR DO YOU THINK SOME OF THEM

WILL CONTINUE TO COME BECAUSE

THEY HAVE THE INCENTIVE TO BUY

CONSUMER GOODS AT A MUCH LOWER

COST THAN THEY CAN AT HOME?

>> I THINK A LOT OF THEM WILL

CONTINUE BECAUSE EVEN IF THE

ECONOMY SPUTTERS, THERE'S AN

AWFUL LOT OF PEOPLE EARNING AN

AWFUL LOT OF MONEY IN CERTAIN

AREAS IN BRAZIL.

AND THEY'RE GONNA CONTINUE

WANTING TO COME HERE.

BUT SOME OF THE LOW-END ONES WHO

HAVE BEEN VISITING FLORIDA IN

MORE RECENT YEARS MAY NOT, YOU

KNOW -- MAY TRICKLE DOWN.

>> YOU'VE TALKED ABOUT SOME OF

THESE SPORTS FACILITIES AND

OTHER FACILITIES THAT ARE BEING

BUILT FOR WORLD CUP AND FOR THE

OLYMPICS AND SO FORTH.

PART OF THE CHALLENGE OF GETTING

THOSE GREAT GAMES TO COME TO

BRAZIL IS THAT YOU HAVE TO

PROVIDE WHAT IS NECESSARY TO

SUPPORT THEM, SO I GUESS IF YOU

LOOK AT THIS FROM THE SIDE OF

THOSE WHO SUPPORT BRINGING THOSE

MAJOR EVENTS TO THE COUNTRY,

THEN THE SPENDING IS JUSTIFIED,

BUT IF THERE ARE MILLIONS OF

PEOPLE WHO DON'T HAVE ANYTHING,

THEN THEY ALSO HAVE A COMPLAINT.

HOW DO YOU RESOLVE THAT?

>> I DON'T KNOW.

ONE OF THE THINGS, FOR EXAMPLE,

THAT BRAZIL HAS NOT YET

ADDRESSED PUBLICLY IS THE WHOLE

QUESTION OF SECURITY FOR THE

WORLD CUP AND FOR THE OLYMPICS.

THIS IS A REAL PROBLEM.

YOU'RE GONNA HAVE PEOPLE COMING

FROM ALL OVER THE WORLD.

GOD KNOWS WHAT ISSUES THEY'RE

COMPLAINING ABOUT.

BUT BRAZIL HAS GOT TO DEAL WITH

THIS, AND THE FOOTBALL

ASSOCIATION IS TALKING

CONSTANTLY ABOUT THIS ISSUE.

>> WHAT SORTS OF SECURITY

PROBLEMS DO YOU ENVISION?

>> WELL, HOW ABOUT THE ENTRANCE

OF TERRORISTS INTO BRAZIL TO

SUPPOSEDLY SEE THE GAMES, BUT

ARE REALLY THERE TO COMMIT

TERRORIST ACTS?

BRAZIL DOESN'T SPEND ANYWHERE

NEAR THE AMOUNT OF MONEY THAT

THE UNITED STATES OR WEST

EUROPEAN COUNTRIES SPEND ON

SECURITY.

AND, TO A CERTAIN EXTENT, THEY

TOOK A CERTAIN PRIDE IN THAT.

AND THERE'S ALSO A SORT OF A

SLIGHT FATALISTIC SENSE ABOUT

THIS, YOU KNOW?

BUT THEY'RE GONNA HAVE TO TAKE

CARE OF IT BECAUSE THE WHOLE

BUSINESS OF SECURITY'S BECOMING

MORE AND MORE PRESSING ON THE

WORLD, PARTICULARLY THROUGH

TELEVISION.

LOOK AT THIS RECENT EVENT IN

KENYA.

THIS IS SOMETHING THE BRAZILIANS

HAVE TO DEAL WITH AND NOT SORT

OF SAY, YOU KNOW, "WE DON'T

HAVE THAT PROBLEM," BECAUSE,

WELL, WHO KNOWS?

MAYBE EVERYBODY LIKES BRAZIL.

BUT I DON'T THINK TERRORISTS

OPERATE THAT WAY.

>> THERE ARE MANY BRAZILIANS WHO

REMEMBER AN EARLIER PERIOD OF

PROSPERITY IN THE 1970s THAT

SEEMED TO BE, YOU KNOW, THE BEST

THING THAT HAD HAPPENED IN YEARS

AND YEARS.

BUT IT ENDED IN A CRASH.

AND WHY SHOULD WE BELIEVE THAT

TODAY'S PROBLEMS WILL NOT END IN

A CRASH?

>> WELL, BECAUSE I HOPE THAT THE

PRESSURE ON MORE EDUCATED,

YOUNGER BRAZILIANS TO DO

SOMETHING BETTER WITH THEIR

COUNTRY -- PROVIDE A BETTER

FUTURE FOR MORE BRAZILIANS --

WILL CHANGE THAT ATTITUDE.

REMEMBER, BRAZIL IS A COUNTRY OF

BOOM AND BUST.

IT ALWAYS HAS BEEN.

I MEAN, IT BEGAN EXPORTING A

KIND OF WOOD CALLED BRAZILWOOD

TO EUROPE, AND THEN THEY

GOT AHOLD OF SOME PEPPER SEEDS

FROM INDONESIA THAT THE

PORTUGUESE SAILORS -- AT THAT

TIME, BRAZIL WAS PART OF

PORTUGAL -- THE PORTUGUESE

SAILORS STOLE SOME OF THOSE

PEPPER SEEDS, AND THEY CAME TO

BRAZIL, AND THEY PLANTED THEM.

AND SO YOU WENT THROUGH A PEPPER

BOOM AND THEN THE RUBBER BOOM,

WHICH MADE MANAUS INTO THE PARIS

OF SOUTH AMERICA -- A GREAT BIG

OPERA HOUSE, FANTASTIC HOMES,

AND ALL THE REST OF IT.

AND THERE HAVE BEEN MANY BOOMS

AND BUSTS IN BRAZIL.

>> IS IT TRUE THAT HALF OF

BRAZILIANS HAVE MADE IT INTO THE

MIDDLE CLASS OR HIGHER?

>> YES.

AND THEY HAVE JOBS THAT ALLOW

THEM TO DO MORE THAN JUST

THREE SQUARE MEALS A DAY.

IT ALLOWS THEM TO BUY THINGS ON

CREDIT, PERHAPS EVEN A CAR.

AND SO THERE'S BEEN A BIG

CHANGE.

I DON'T KNOW HOW MANY BRAZILIANS

THAT ACT-- BUT IT'S MILLIONS OF

THEM NOW HAVE ACCESS TO THIS.

AND THEY WANT BETTER SERVICES