Of course, such inflow imposes further costs in terms of profit repatriation by foreign companies, the servicing of debt and so on, and makes the balance of payments problem over time even more acute. Thus, currently, because of import contraction and desperate measures to generate more exports, the Brazilian external trade account now shows a modest surplus. But because of major outflows primarily in the form of repatriation of profits by the new MNC owners of all the recently privatised assets, the current account is in deficit to the tune of as much as $ 24 billion. Meanwhile, the privatisation process has also been beset by problems, with chaos in telecom for nearly a year, and significant increases in premia and declines in claim settlement for consumers in insurance.
 
The current account deficit is being met at the moment through fresh capital inflows which are either in the form of Foreign Direct Investment primarily buying up domestic assets or investing in the newly liberalised telecom sector, or finance capital like portfolio inflows and external borrowing. International finance is currently pleased with Brazil, which is now being patronisingly described as "the IMF's star pupil". This has allowed for the stability of the Real over the past year, relatively low inflation of around 9 per cent as well as some modicum of growth after the recession of 1999.
 
But the pattern of the recent recovery makes it very clear whose interests it is in. Employment has still not recovered - indeed, the estimates suggest that jobs in the formal sector are still being lost. More retrenchment is on the cards as the full impact of privatisation is played out. In Brazil, as in India, poverty and the absence of a general social security system mean that open unemployment is not an option for most people, so official unemployment rates do not show the true extent of joblessness. But as the favelas of Rio and Sao Paulo show, the cities are full of poor people who engage in low paying informal sector activities, unable to find more productive and gainful employment.
 
Meanwhile, the financial sector has practically never had it so good. The government's orientation was made deliberately explicit in the appointment of Arminio Fraga, formerly deputy of the international private financier Goerge Soros, as the head of Brazil's central bank. It is now commonplace that developing country Finance Ministers are chosen in a manner designed to placate or please international capital, but this may be the most blatant expression yet of the subservience of national interests to the whims of global finance.
 
Despite the kudos it has received from the international financial press and from the IMF, the government's domestic popularity is at a very low ebb. President Cardoso's personal ratings in the polls have fallen yet again recently, and the recent municipal elections - especially in important states like Sao Paulo - have indicated substantial gains for the opposition, especially the populist Workers Party. There is a widespread sense that the government's priorities are inadequately focused on the needs of the people, and that its policies create continuing dependence on external finance.
 
Despite all these problems, there is still a sense of hope in Brazil. Partly, the significant success of some decentralisation experiments such as that in the town of Porto Allegre and the ability of public pressure to extract increased public spending on sectors like education have been responsible. But it is also true that - insofar as generalisations about national character have any value at all - the fundamentally positive, laid back and celebratory attitude of ordinary Brazilians themselves also has a role to play.
 
We in India are familiar with the amazing resilience of those living in poverty. This is also marked among the urban poor of Brazil. From the favelas come numerous stories of the urge to joy triumphing over all sorts of material obstacles. This is manifest for example in the annual carnival that lasts over four days and is apparently an uninhibited social outpouring of continuous revelry that defies description. Perhaps it is this more social feature, finally, that makes Rio such a beautiful city.