point of view, Brazil and Argentina have to be together in the next month, maybe the next years, for the international disputes as to the FTAA, the MERCOSUR with the European Union (EU) and the World Trade Organization (WTO), among others. That is to say, the Argentine situation affects us directly.

Was Brazil asking, in any way, for a devaluation in Argentina?

For some people, I’d say for those who experienced the situation more closely in the last years, it was not feasible to keep the convertibility system in practice, and of course, they have a very critical view of what’s known as the currency board. But there were others who believed that Argentina’s exit from convertibility would be so dramatic for them that it would redound in the maintenance of the system, which would look for other exits; this is exactly what Minister Cavallo tried to do and failed.

The Argentine Foreign Affairs Minister, Carlos Ruckauf, met with President Fernando Henrique Cardoso, who had a very nice gesture by donating doses of insulin lacking in Argentina due to devaluation…

I had the chance to speak with Minister Celso Lafer on this issue, and he confirmed that the meeting held with Cardoso and Ruckauf was extremely friendly, and that Brazil is willing to cooperate. I, myself, as businessman, told Lafer that I am at the entire disposition of the government and the Argentine people to cooperate in anything I can

"...Celso Lafer...confirmed that the meeting held with Cardoso and Ruckauf was
extremely friendly, and that Brazil is willing to cooperate"

Thinking in terms of business trade between Brazil and Argentina, how do you think the Argentine devaluation will influence Brazil?

As for trade, we should break the matter down into two immediate aspects. One of very short term, and another of short and mid-terms. In the very short term, I think we will continue with the contentious trends – now aggravated by the financial crisis -, but in the short and mid-terms, when the crisis is overcome, I think we will reach a relationship that won’t bear the problem of two exchange systems that created a conflict situation between the two most important partners in the MERCOSUR. Because from the moment the Argentine currency searches its new referential, I think we would be able to have two exchange systems that will harmoniously coexist for both countries to reach macroeconomic convergence measures, and maybe, in the near future, we might go forward to have a single currency for the MERCOSUR.

How do you think this process will end in Argentina

I have a positive view, but the comparison I would make is as if the British decided to change the drivers’ side of the car, and go from the right to the left overnight, in a day with no lights in the street, and a terrible storm. By this, I mean that changing a 12-year-old-monetary system in a time of political crisis and recession is a very complicated thing to do. Also, I think that everything depends on the Argentine people, from their support to the government in order to overcome this difficult moment of transition.

Is this moment in Argentina somehow similar to the Brazilian crisis in 99?

This is a relatively similar moment, but different. Because in the 99, Brazil’s system was not of fixed exchange, but of bands of exchange with a minimum fluctuation, and it never was a convertibility system. Besides, Cardoso had the Congress’ support, and Brazil was not undergoing such a strong recession, unemployment didn’t reach Argentina’s levels and we didn’t have such a serious social situation. On the other hand, the international situation was very different, the United States was prosperous and Clinton’s situation was much friendlier and supportive to the countries of the region.

Who do you think Argentina should expect aid from: the IMF, the international organisms, the United States, the MERCOSUR neighbours, the Latin American countries...?

I think it should expect a combination of all, but it is mainly the Argentine people who have to be understanding on the difficult situation of the country after four years of recession. Things cannot be change if the society is not willing to commit itself and change their opinion about the country. The image of the country is not made up in Washington, or Geneva, or Brussels, or Santiago, or Sao Paolo, it is made up within the territory. If Argentines have no trust on the country, nobody will, therefore, when there is internal confidence, things are going to change, and aid will be fundamental.