Excerpts from an Interview with Manuel Castells, a Spanish sociologist who is an old friend of Cardoso and who teaches at the University of California at Berkeley.  The original was published in the Folha de Sao Paulo, 8 February 1999.

Castells:  "If there is not a fundamental change in the Brazilian political class, to support a project of modernization, Cardoso will fail.  This will not be his own fault, but the fault of the Brazilian political class. "

Clovis Rossi (Interviewer):  Are you disappointed with Fernando Henrique.

Castells:  "No, absolutely not.  I defend him in all the forums in which I participate in the world.  It is true that we are good friends, but since I am a free intellectual, when I have criticisms, I make them.  In relation to Brazil, there are two things to consider.  First, where it came from.  Five or six years ago, Brazil was an absolute chaos, having had a president who was a thief, the economy was destroyed, inflation was out of control and the poor people were those who suffered most.   Given this situation, Cardoso's obsession with cutting inflation appears to be a historic obsession, because it was also a historic vice and it was a form of extraordinary social inequality.  Because Cardoso was and is obsessed with not returning to inflation, it may be that the defense of the real, in some moments, has gone to extremes.  Some months ago, I sent him an email saying: `do not spend billions of dollars, because it is not going to do any good if the markets act against it.  The problem is to assure that the markets do not begin to move against the money because, once they start, there is no government which can cut off the speculative process.'"
    "Contrary to what some say, Cardoso did not base his economic policy on the effort for reelection, but just the opposite.  In order to avoid inflation, a few months before his election, he enormously raised the interest rates, freezing the economy and causing unemployment."

    "The overvaluation of the real is one part of the Brazilian crisis.  But I do not believe it is the fundamental element.  The fundamental is that, in these markets, informational turbulence (turbulencias informativas), more than economic analyses, are what generate these movements of entry and exit [of capital].  In Brazil the informational turbulence was Itamar Franco's declaration of a moratorium on the debt of Minas Gerais.  It is not that he was so powerful as to change the markets.  But in such a tense situation, in which the markets were watching to see what would happen in Brazil, and were disposed to leave at the first negative sign, this was the factor which set it off."
    "The great problem is that Brazil, today, there is no political and social consensus to subordinate partisan interests to what is decisive:  to assure that Brazil enters the global economy with a modern and dynamic economic system. "

    "The contradiction which Cardoso faces is the same as that which Mikhail Gorbachev faced in the former Soviet Union:  how to reform the Communist Party without at the same time destroying its power.  How can Cardoso reform the State with the support of  the State, when many interests created by the state will be overthrown (golpeado)?"

Covis Rossi:  Many people say that what is missing is strong leadership.....

Castells:  "Cardoso is not only a democrat but a man of consensus.  He cannot modernize the State and the relationship between the State and society by himself.  He is not a messiah.  He has to negotiate with the Congress and with society.  It is a task which requires political craftsmanship.  But if you compare Brazil with other countries, the level of leadership is superior to that of the United States, where, for a year, the politicians have dedicated themselves to the Monica Lewinsky issue."

Colovis Rossi:  One of the criticisms which is made of Cardoso is that he promoted the integration of Brazil in the world in a subordinate position.

Castells:  "Since the reality is so new, it is not always recognized that we are not in the process of integration between nations, but between economic networks.  It is not that Brazil is becoming integrated in the American economy.  One must choose either to be in or out of the global economic networks.  It is not Brazil, but the Brazilian companies, which must be in the global economy, and, at the same time, be capable of generating wealth in the country."
    "The most important task for the Brazilian State is to facilitate this integration in global networks and Mercosul.  The world is already organized in global economy with regional areas (the European Union and NAFTA)."
     "To do this, Brazil has three major tasks.  One is Mercosul.  The second is to change and develop education, because the resources of the new economy are human resources.  The third is a change in the model of social inequality and the existence of a weak internal market, which is very large in population, but not in the ability to consume.  But the political machinery is so deteriorated and dysfunctional that it is possible that any attempt at a more profound reform will generate a paralysis."

Translated by Ted Goertzel