Brazil Gets a Dose of Free-Market Remedies

Dilma Rousseff—conservative? For those who know the story of Brazil’s president, that label seems impossible. Rousseff is a former guerrilla and political activist whose sympathies are clearly on the left. Yet she’s so determined to get Brazil’s economy growing again that she’s abandoned her Workers’ Party line to open the country’s crumbling infrastructure to private management. She’s also adopted an industry-backed agenda to cut costs for business.

The move is part of a broader shift in policy from fueling a decade-long consumer-led boom to boosting competitiveness and private investment, particularly for local manufacturers who have lost market share to cheaper imports. Thanks to lower overseas demand for commodities, falling investment, and rising household debt, Brazil, which rivaled India and China in 2010 with economic growth of 7.5 percent, will grow less than the U.S. and Japan this year, according to a Bloomberg survey of economists.