Brazil candidate vows to end poverty, reform taxes

* Debt reduction key to more competitive economy- Rousseff

* Will target tax breaks to create jobs, boost exports

By Raymond Colitt

BRASILIA, May 25 (BestGrowthStock) – Brazil’s ruling party
presidential candidate, Dilma Rousseff, pledged on Tuesday to
eradicate poverty and propel Latin America’s largest economy to
developed-nation status if she wins October’s election.

“We can and we will transform our economy from an emerging
nation to a developed nation,” Rousseff told the National
Industry Confederation, the country’s leading business
organization, in Brasilia.

“Our pledge is to do so by eradicating poverty. We can do
it. All studies point in that direction.”

Rousseff, President Luiz Inacio Lula da Silva’s former
chief of staff, is tied in most opinion polls with former Sao
Paulo state governor Jose Serra of the centrist PSDB party.

Dubbed the iron lady, the former left-wing activist is
trying to replicate the mix of mostly market-friendly policies
with social welfare programs that has made Lula the most
popular president in recent history.

The Lula administration pulled millions of people out of
poverty with new and better-paid jobs as well as expanded
social welfare programs.

MIDDLE CLASS

According to a government study, poverty has fallen by 3.1
percent annually over the past 5 years and could fall to 4
percent of the population by 2016, from 28 percent in 2008.

Eradicating poverty would generate more potential consumers
and create a middle-class society, Rousseff said.

“Our objective is for Brazil to be at least middle class.”

While most business leaders are content with economic
growth in excess of 6 percent this year, they presented Serra,
Rousseff and the third-place candidate, former environment
minister Marina Silva, with a laundry list of complaints.

Brazil’s international competitiveness is being eroded by
high taxes and interest rates, a strong currency and red tape,
they said.

One of the key objectives to help improve Brazil’s
competitiveness would be to reduce public debt as a percentage
of gross domestic product by maintaining a primary budget
surplus of 3.3 percent of GDP, Rousseff told the audience of
business leaders.

“The debt to GDP ratio is key because it will allow
interest rates to converge to international levels,” Rousseff
said.

The country’s benchmark lending rate is currently at 9.5
percent and is forecast to rise to 11.75 by year-end, according
to a weekly central bank survey of local economists.

Rousseff’s main economic policy initiative would be to
overhaul the country’s unwieldy tax system, which stifles
value-added production.

“I commit to this reform, which is essential, the reform of
all reforms,” she said, adding that she would grant tax breaks
to specific industrial clusters to create jobs and boost
exports.

Investment Analysis

(Additional reporting by Maria Carolina Marcello; Editing
by Eric Walsh)

Brazil candidate vows to end poverty, reform taxes