Okay go ahead. It doesnt have a clear lever and political mandates. The principal leader of the organization, the main political figure in result is the former president , Founding Member, a Founding Member of the wilson center, another program i laid there. The president has resisted calls by members of his party for impeachment of president dilma rousseff, thing that impeachment is not philosophical thing. Enough to cause. The causes are described in the constitution of brazil. He i think finally was able yesterday to unify the discourse a little bit by calling the governor of sao paulo and has abandoned this idea to try to call for new elections after obtaining the cancellation of the action which was a kind of not a viable opposition from the start. There was nothing particularly wrong with the way the president was elected. Thit should not be pursued. But president cardoso after the rallies that took place on sunday, had about 800,000 people in the streets. They were smaller, the rallies, than previous ones. It did not create new momentum for impeachment or anything of the sort that they were informed. They kept pressure on. There was enormous support for the judge and for the prosecutors. For the first time that Little Pockets of [inaudible] a new thing in brazil. Its really meaningful because the president was at one point the most popular kid in brazils history, highly respected. President cardoso issued a very important statement on monday. I will translate it and i will read it to you. The most significant part of the demonstrations such as the one that took place yesterday is the persistence of the popular sentiment that the government already legal is illegitimate. It is lacking a moral base that has been eroded by the shenanigans of [inaudible] similar to the method for of the prisoner, even though our president can personally protect herself, she suffers by the misdeeds after patron and continuously loses the ability to govern. At this Point Coalition behind closed doors is only increasing the negative reaction of citizens and does not return the legitimacy to the government collusion. That is, and acceptance of its right to command to lead. This is an important reference that i just mentioned to you. If the president is unable to make gesture of greatness, which would be either to resign from office or to frankly admit that she made mistakes and offer bets to be taken for national recovery, we will witness the growing district regulation of the government and congress, taking it from the scandal. That is until a leader with moral strength, and here he mentions the man who led the campaign to win democracy following the military dictatorship, constitution and. [inaudible] you think you are president , but you know longer are. And this counts comes from president cardoso, and expertly or which has so far refrained and recommended people from his party from insisting on impeachment of a president that so far has not been accused of committing any impeachable offense. But i think its a very important element of this discussion, and i wanted you to leave with this. We will have this statement, was obviously distributed widely in brazil, and we will continue to focus on this discussion. There is a problem in brazil that although the crisis to the people is economic, its a deep political crisis of a system that is slowly unraveling, but its unraveling i think in a way that can be productive. You are not going to see a rupture in brazil. Brazil will not cease being democratic. The objective of all the we form has to be economic stability, sustainable growth. I would say that will not happen if brazil does revised some of the tenets of our system. One of them i dont think investors confidence in brazil will return if we dont start to open up our economy, and also we dont use the lessons to conclude Corporate Governance in brazil. I think those are the changes we have. I think people are ugly or fat and there are people doing good work in brazil and all those areas, including businessmen, including research organizations, et cetera. Thank you. Peter, productive unraveling, anything new . Let me just say we learned a lot. But i just add one thing to this. What i think you have in brazil is huge uncertainty, unpredictability. Almost anything you here today is sort of in discussion. There is no sure path out of this crisis. Theres no sure path out of the corruption. Theres no sure path, and so i think that sort of any prediction is going to be sort of shifted. Whats in the news this morning we dont know because we are sitting here. So i just want to sort of be, theres so many things. First, the Approval Ratings of the president are now between eight and 10 , which is extraordinarily low as we know. There is no indication that thats going to change anytime soon. When you have a president thats at that low level of approval, sort of the foundations of government are very, very shaky. Second, and thats why, let me just say that some predictability to say i think that brazil and the president particularly is breathing easier today than they were before the demonstrations. And a lot has happened in the past couple of weeks that does suggest a slightly easier path for her, but things could change very, very quickly. The economy really does remain in terrible shape. Everyday the news are that the recession is going to last longer than it has been predicted yesterday. That the Austerity Program sort of put in place by one of the most respected economists in brazil, respected across the political spectrum, is really not working very well. He called for a reduction in the fiscal deficit of 1. 5 . Its slightly to be about zero now. So just the shaking of the economy, the uncertainty there creates enormous political uncertainty. And investors and Business People are all sort of waiting and watching and trying to figure out how do you react to this. The scandals, which i havent mentioned yet, the corruption, is going to keep spreading, spilling over, spilling over into other countries of latin america. Its not only affecting petrobras but other big huge Government Agencies involved. And remember, you to browse was 10 of the brazilian economy petrobras. Execute. Thats like a state of california going into a sort of totally scandalous situation. This is a huge, huge company. Theres nothing like it in the United States as part of the company. Then you have electoral bronze and have a dozen others that are and its not only a Public SectorCorruption Scandal. Its a private, this is a Publicprivate Partnership and your the Major Construction companies, multibilliondollar Construction Companies involved and thats only one sector. There are other sectors that are probably involved in will be discovered. So in other words, all insane, not that it can be solved and the dont want to sound overly pessimistic because the reason to sort of see some glimmer of life but i think the emphasis at this point has to be on unpredictability. The other problem that i have with what weve heard and im going to sort of skipped over a lot here is whether this is an institutional crisis or a governance only political crisis. Well, you know, you have three branches of government in brazil like you have three branches in the United States, very similar in some ways. And two of those branches are in a bit of chaos now, a bit of uncertainty. Turmoil may be the better word. The executive branch, obviously the president with low Approval Ratings, other members of the executive branch, other senior officials have been involved in this scandal, previous scandals. Remember, petrobras is a state run oil company. Its not high officials running that. So you have a real institutional crisis i would say in the presidency. Secondly, the legislative branch which is sort of seen and viewed by most, the scandals work because its corrupt. The legislative branch. And there, too, you sort of see divisions, 27, 20, 29 parties in congress, the Largest Single Party control lets say maybe 15 of the seats in the lower house. So you need coalitions and it have to be crafted, and how are they crafted, by jobs, by sort of bribery, or by sort of earmarks to the local constituencies of different so you to branches that really are sorted in crisis. The judicial is working like no one had expected it. It was five or six years ago you talked about the judicial system being dysfunctional. In part its working though. Let me say i think that its working because the other two branches are parallel. In other words, in most other cases in brazil where youve had this kind of problem, presidency, the executive branch could sort of keep a lid on it. Or the legislature could keep a lid on it. Now you dont have that. In fact, coupled with that i dont want to leave that out, assorted street demonstrations which have also made it harder to put a cap on that. Let me add if i think theres one i would say, not one, but the positive note and let me in a little bit on a positive note, is that i think there is more of a consensus on what has to be done in brazil. Regardless of who is in the position. Once the fight over, whether to impeach or not to impeach, is sort of more or less settles down, the economic program, wildly unpopular in brazil and probably one of the causes of the marches is, in fact, probably a wellcrafted, well thought through program supported by business leaders, most of the political establishment. So you have that. And she is putting their weight behind what is left. Secondly, the fact what others have said, the judicial system is showing its ability to move forward, and the legislative and executive branch are not interfering. Think of the other crisis that paulo bitchen, with the exception of chile, the prosecution of crimes this thing stopped. Not being investigated. The judicial system is working and that something, and the legislative and executive are letting it work. And finally, in other words, everybody is screaming about the transport had to establish relations with the United States. She made an early trip to the United States, didnt accomplish a whole lot, establish a little more open channels. Doesnt mean a lot within the brazil crisis now but it might mean Going Forward quite a bit. Also talking the opening the economy as you suggested, talking a sort of the need for reforming. In other words, theres a lot of very positive language got a lot of different politicians could support at all this. In other words, there can be a consensus output if it comes together. The one thing i was a little, i wish fernando would have been a little firmer in this last statement though, paulo. In other words, to say this is not the time for impeachment unless there is some room activity discovered. But he didnt say that. In fact, he talked about her either resigning or apologizing, and i have not, couldnt, cant think of, maybe this audience will think of a leader that gets up and says ive made all these mistakes for the past four years, is a list of the mistakes ive made, and now i want you to support me in the future. And think of one that survived any kind of apology like that. Like i say, i think when fernando comes out stronger in the party which has been divided on this issue comes out stronger, that would be a very good sign to look for. Michael asked for signs. That would be the best sign. Great. Thank you, peter. A lot of issues. I have a number of questions but im going to forego that because we have about 40 minutes and i look aroun around this room andy see a lot of people who have been following brazil and im sure have a lot of questions, feel free to also make comments. You dont have to disguise them as questions. Just make a comment. Tell us what you think, react, and well start with larry. And just please tell us who you are, wait for the microphone and try to be as concise, succinct as you can. Larry, you will set the example im sure. Washington diplomat. During dilmas recent trip to the United States which peter you alluded to, she met with president obama into various ceos in new york and in the Silicon Valley and consensus at least there was that it was a german a successful trip to catch up patch of previous differences. Despite her extremely low Approval Ratings, what is this, what are the implications on our bilateral relations . Specifically for brazils efforts to attract u. S. Investment. Thanks. Why dont we take some others . I will start with margaret. Margaret hayes, im an adjunct professor at georgetown right now. Youve talked about the economic crisis, but you havent mentioned that this economic crisis really is generated because brazil didnt take advantage of the commodity income to diversify, to invest in in people and so forth. What kind of discussions, if any, are going on within the Business Community as an economist and so forth as to what specific structural changes need to be pursued in order, not to go through the same thing all over again . Great. Yes, here. We will get to more and then go back to the panel. Washington correspondent. Kind of a followup of the first question. Much has been said about the risks of dilma going down. I would like to ask what are the risks of dilma staying in power . For brazil, for her. To use american expression, what are the risks of having a lame duck president for the rest of the readers . And specifically, the way the American Government are specifically the American Government, lameduck president , can do business with this government . Thank you did the one final comment. Gretchen smallwood executive intelligence review, and i have to as usual bring in a broader reality. In terms of youre welcome. Reality is very frightening right now. The Daily Telegraph of london yesterday that headline which i think is useful in what were discussing as a socalled are still crisis, which is Doomsday Clock for global crash strikes one minute to midnight as Central Banks lose control. I would add to that and weve added to that, that we are one minute to midnight, global confrontation of the United States with russia and china, and that in todays world would be certainly nuclear. Deliver discussing much more, well, thats the context of which were discussing brazil. In one way i would like to know if anybody has given consideration to a backlash, i know there are sectors, national sectors if you want to call in brazil, and i think this would be more in the industrial military, the Defense Sector of that, who views it does. When apple was elected, that was with a Nuclear Submarine project is gone after. As you said this is every major brazilian private company to do this brazil that is being gone after. There are people who view this as a Color Revolution coming from foreign interest which i think is something to be considered. Thats a pretty strong thing, particularly given that brazils brick allies as russia and china in particular identified cultural revolution as strategic methods of doing regular water. Thats it. A comment on the backlash. Thats it. Thank you very much. Well go back to the panel and have other questions. [inaudible] with respect to the economic debate, i think there are two main issues being discussed, almost, i wouldnt call it military defenses, what needs to be done there and think theres a growing understanding that the formula that worked in the past doesnt work anymore and we are reaching a moment, a crucial moment that changes need to be implemented. I think to keep issues are, what is fiscal, that the current imbalance brazil is facing, we talk about fiscal austerity, the restructuring of called ice cream, whatever you want to go to make it seem nicer, that its more structural than many things. The original sin is 1980 constitution, where it basically, it created a huge entitlements and mandatory spending. In fact, there is a study on a wellknown economist in brazil that was published recently, got a lot of traction because its showing whats going on now, just the mismanagement of economy of the last couple of years. Its more a structural factor that if nothing is done in terms of reforming constitution, reforming pensions, labor, et cetera, that brazil needs to call new Transaction Task every four years which that transaction tax expired in 2007 generated 50 billion, 60 billion a year. Every four years just to get the finances in order. Overall there is a sense that the structure of entitlements and mandatory spending needs to be addressed. And theres no politician with a mandate to do it yet, and i think thats going to be a challenge not only for this government but for whoever takes over and the next couple of governments. And the second issue is actually improving relationship with the private sector in brazil we always like to compare brazil with italy, what happened with italy in the 1990s, the last two or three years, sometimes they say when they did in . They say it still hasnt ended. This was the 1990s. If that basic is a Corruption Scandal that escalate and reached different economic sectors and the political system in italy your the Political Parties vanished. It led to in brazil we dont think we face that risk or at the same time italy was going through, joining the euro, the common currency. We dont have that in brazil. But at the same time we do have i think the same factors, the same features that make result politics dysfunctional. Makes the cost of doing business in brazil high, high tax burden, interest rates, logistics. These are ironically the same factors that channel policymaking in brazil towards more modern ground. When you look at argentina, for example, the pendulum, the shift in policy from the neoliberal 1990s, 10 years later, brazil followed the same path but moderate