Georgetown University’s Newspaper of Record since 1920

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Georgetown University’s Newspaper of Record since 1920

The Hoya

Georgetown University’s Newspaper of Record since 1920

The Hoya

Brazilian Finances on Tap

Former Finance Minister, President of the Central Bank and International Monetary Fund Representative of Brazil Pedro Malan spoke about Brazil’s economic challenges in the Fisher Colloquium on Wednesday.

The Brazilian Club, the Stanton Distinguished Leaders Series at the McDonough School of Business, the Lecture Fund and the Latin American Board co-sponsored the event, entitled “The 20th Anniversary of the Real Stabilization Plan: Dialogue Between Past and Future in Brazil.”

Throughout his time as Finance Minister of Brazil, Milan helped craft the Plano Real, a comprehensive economic plan that worked to lower the country’s inflation rates, which reached an all-time high in the mid-1990s. Malan spoke about the plan, but also about his reinterpretation of the plan over the years. According to Malan, it is important to reevaluate the past to create new perspectives.

“The fact is, [with] every single generation, a part of it revisits, reinterprets, tries to understand what happened. … The past is constantly being revised, rewritten by success of generations, although it’s irrevocable as the future is uncertain,” Malan said.

Malan also discussed his experiences as a civil servant in Brazil. He maintained his work in the area of international finance continues to interest and excite him.

“You’ll never be bored being interested in international economics and international finance because there will always be crisis,” Malan said. “There will always be something challenging and stimulating that will make you feel that you are alive. The field itself has the gift of eternal youth.”

One major crisis that Malan faced as Brazilian finance minister was the country’s rising inflation rates. In 1993, the inflation rate was nearly 2,500 percent. Malan’s Plano Real helped bring the rate down to around six percent in 2013.

“It worked. It was a very high risk because 1994 was the year of elections and it had to be done otherwise we’d have a heightened inflation in the transition,” Malan said.“It was not an end in itself. It was absolutely fundamental.”

Malan also spoke about the changes in the economic world sphere in the 1990s, claiming that major events such as the launch of the Euro as currency, the collapse of the Soviet Union and the fall of the Berlin Wall greatly affected economic trajectories.

“Each of these things that I mentioned joined forces in a major technological change which reduced the cost of commercial and financial transactions and provided information to hundreds of millions of people about what’s going on in the rest of the world,” Malan said.

Despite past economic turmoil, Malan continues to hope and have confidence in the future of Brazil.

“I have a big confidence in my own country. Let me tell you why. It is clear to me that the country changed, and not for the worse,” Malan said.“The country changed for the better as a whole. … Overall, I think that the country is better today than it was in the past and has enormous potential. It is an extraordinary country that is very complex to understand and to administer.”

Students in attendance enjoyed the lecture, due to Malan’s expertise.

“I think that Pedro Malan was an incredible insight into Brazil’s rising economy,” Alexa Pereda (SFS ’17) said. “His optimistic look towards the future of the country showed how much potential Brazil has to keep rising in the international markets. Brazil is definitely a country to look out for in the coming years.”

Muriel van de Bilt (SFS ’17), a student from Sao Paulo, Brazil and a member of the Brazilian Club, said that she gained new insight from Malan’s lecture.

“I really enjoyed his perspective over Brazil’s economy and the potential areas of growth with a bigger inclusion of the private sector,” van de Bilt said. “I enjoyed this perspective because it is in some sense a different approach from the current government.”

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