UPDATE 2-Brazil’s Rousseff criticizes rich countries at UN

by on September 25, 2012 4:01 pm GMT

Tue Sep 25, 2012 12:01pm EDT

* Rich nations’ policies making crisis worse, Rousseff says

* She says legitimate trade barriers are necessary

* Brazil also toughens language on Syria

By Brian Winter

UNITED NATIONS, Sept 25 (Reuters) – Brazil’s President Dilma
Rousseff harshly criticized the economic policies of rich
nations at the United Nations on Tuesday, saying they were
failing to end the global crisis and harming emerging markets
such as hers.

The left-leaning Rousseff said budget cuts and expansionary
monetary policies in the United States and Europe were having
severe negative side effects elsewhere in the world, causing
Brazil’s currency to appreciate and damaging its exports.

She was the first head of state to address this year’s
193-nation U.N. General Assembly.

Rousseff’s comments came as she faces growing political
pressure at home over an economy that has barely grown over the
past year. She has also endured intense criticism from
Washington and elsewhere over her recent decision to raise
tariffs on about 100 goods, a move that fanned fears of rising
protectionism among emerging markets.

The leader of Latin America’s biggest economy addressed
those concerns head-on, saying Brazil will continue to protect
its industries within legal means as long as rich countries
continue to flood the world with cheap money.

“We cannot accept that legitimate trade defense initiatives
by developing countries be unfairly classified as
protectionism,” Rousseff said.

Brazil and the United States publicly sparred last week over
the tariffs, with U.S. Trade Representative Ron Kirk urging
Rousseff’s government to reconsider. Brazil retorted that U.S.
monetary policy had unleashed a flood of imported goods at
artificially low prices.

Rousseff and other Brazilian officials have been lashing out
at rich nations for years now – for example, popularizing the
term “currency war” to describe how rich countries have weakened
their currencies by printing money.

While the criticism seems to have failed to lead Europe and
the United States to reconsider their policies, it has helped
provide some political cover for other countries in Latin
America and elsewhere to implement trade barriers and erect
capital controls to protect their currencies.
 Rousseff presented Brazil as a case study for how to solve
the crisis without resorting to severe budget cuts, pointing to
40 million people lifted out of poverty during the past decade
or so. She said the choice between austerity and economic growth
“is a false dilemma.”

“We know from our own experience that the sovereign debt of
states as well as the bank and financial debt will not be dealt
with in the framework of a recession. On the contrary, recession
only makes these problems more acute,” she said.

Rousseff also weighed in on the civil war in Syria, saying
that Brazil, which has aspirations to become a permanent member
of the U.N. Security Council, condemned the violence. However,
she declared that “there is no military solution” to the
problems there.

Brazil has occasionally cast itself as a mediator in the
Middle East, attempting to help find a diplomatic solution to
Iran’s nuclear crisis in 2010, for example. Although Brazil has
historically been reluctant to support armed intervention in
other countries, Rousseff’s government has begun using stronger
language on Syria in recent weeks as civilian deaths mount.