Discussing the mass protests in Brazil and Indonesia and the silent vigils held in Turkey after protesters clashed with police, with CNBC‘s Michelle Caruso-Cabrera, and Niall Ferguson, Harvard economist. Ferguson said that Paris could burn this summary.
Niall Ferguson Video and transcript below
Violent clashes in brazil last night. protesters attacking police and guarding the state assembly in rio with molotov cocktails.more than 100,000 people took to the streets in at least eightmajor brazilian cities to protest hikes in bus and subway fares.there’s also anger over poor public services generally, overgovernment corruption and social issues. this, of course, all happening in the middle of concacaf, the big soccer tournament, that is a practice run for next year’s world cup in brazil. in addition, pope francis is set to visit the country next month, and then there’s the olympics in 2016. let’s take a look at video of commuter helicopters flying over the traffic in sao paolo in 2011. the wealthy use them to get from point to point rather than driving. michelle caruso-cabrera was there, actually helped shoot some of this footage, and saw the problems that this booming economy is having, and she joins us now, along with niall ferguson. michelle, what does it tell you that that 100,000 people will come into the squares and streets of many cities in brazil to protest a hike in bus and subway fares? yeah, a nine-cent hike in bus and subway fares, showing deepdissatisfaction with the infrastructure in the country which is so tough. i mean, the poor, forced to ride on buses that are extremely slow. the traffic is horrendous. that is why sao paolo, for example, has more helicopters per capita than any other cityin the world, more landing pads than any other city in the worldon top of all the buildings, because the ri want to avoid the traffic and also the crime that is on the ground. what you see with all of this violence, people see a lot of money being spent on newinfrastructure for stadiums, for the world cup, and they don’t see very good roads or ways to get around, really frustrated and they feel forgotten. niall, react here to what we’re seeing. you mentioned earlier the idea that the wealthy are doing very well in this country in part because of the rising stock market and qe2 and 3 and 4 and 5, whatever they are, but the poor, of whom there are many more is not doing so well is this a symptom of that and a stress on the social fabric that could come to even a country like ours? i’ll put it differently. i was in sao paolo three weeks ago, and it’s quite few the infrastructure sucks. this is a movement rising expectations. this is a country doing muchmore than its historical average. it’s had a really golden decadeand, of course, promoted to the brics by goldman sachs and theeconomy has been doing less well. i who is short brazil and long mexico last year and people have gotten used to rising living standards and inequality coming down in brazil from itsextraordinary terrible heights and now as the economy slowsdown, the frustration boils over because people’s expectationswere rights and now they are disappointed. it’s interesting that it starts with infrastructure, but this is also a problem ahead of anelection, and really you have a government which has becomesomewhat paralyzed by the prospects of re-election playing be a incredibly cautious came and hoping to make it to the newelections next year and, unfortunately, not making it. could i add to that, niall, and sue and tyler. the government responded to the slowdown in the economy by lots more spending, lots ofinfrastructure projects and countries make things over and over thinking we’ll big build stadiums and don’t do things that would reform the economy, make it easier to start a business or make it easier to hire people which would solve a lot more of their problems with what they are doing with all the big building.niall, i guess the question is now we’ve seen turkey. we’ve seen brazil what. other emerging markets are susceptible to this type of uprising? you’ve just gotten back from traveling around the world. what did you see, and which markets are you targeting right now? there are two places that immediately spring to mind, two kinds of city that we could see burn this summer. i think the big european cities with paris at the top of the list look extremely vulnerable, and, remember, paris has a greater tradition of urban rioting than almost any city in the world. the situation in that economy is bad, and the youth unemploymentproblem right across latin europe is really, it seems to me, an explosion waiting to go off. the interesting thing is that these riots have been happening in places which don’t have thoseproblems, istanbul, sao paolo. we also had trouble in parts ofstockholm that you don’t think of as a place that’s about to blow, so it looks like we should also keep our eyes open for trouble in big emerging market cities where the rising expectations are about to be disappointed. maybe even china works knows. i was going to say. does that include china? been in china, spent most of april there. the leadership really seriously worried about the possibility of revolution. why are they readingdetoqueville’s old regime in the revolution? they think they are 18th century france and that’s skeptical. skeptical what i heard about, i asked are you really reading detoqueville, and they saidabsolutely. the chinese are really worried. my guess is they have a better handle on this their their counterparts in brazil because one thing the chinese communists do pretty well is public order. they run a pretty efficient police state so i’m notexpecting riots in shanghai or beijing but clearly other emerging market cities that could experience the same thing. there’s a copecat effect. that’s true. you see it on youtube and you’re tempted to take to the streets in your city. i see brazil on the one hand and michelle and nia on the other turkey. we talked about that at the top of the program. to what extent are economicgrievances at play in what’s been going on in turk? michelle, why don’t you go first and then, niall, jump in. turkey is a slightlydifferent situation. yeah. because you had people protesting.they felt there was too much development going on there, but, at the same time, i think you could talk about turkey, brazil and china and note commonality amongst all countries, inflation.inflation is problematic, a big problem in china, a big problem in brazil. less so and as a result you want to get the poor upset and you want an uprising. inflation will do it. when your monthly or weekly paycheck can’t keep pace with the price of oil to cook your food, it’s ripe for unrest. do you agree, niall? the turkey situation is a political story, pushback against political islam.look what’s happening in other cities in that area. if there’s one place i worry a lot about, it’s cairo. egypt is on the edge of a cliff,and i could well imagine it going over that cliff this year. all right.niall, thank you very much. michelle, great to see you.
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