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Brazil is moving from Third World to First World
by Newropeans-Magazine
2010-10-21 08:47:01
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If Brazil has long lived out its personal fantasy as the archetypal relaxed, tolerant and gregarious country with Copacabana beach, the samba, the carnival and a great deal of sexual freedom it is now living out in real time its almost forgotten societal dream, an economic-cum-social revolution. The retiring president, Luiz Inacio “Lula” da Silva, has bequeathed the nation a vibrant capitalist economy with a human face- an economy that has raised income per head quite substantially (it is now twelve times that of India or China), has almost abolished daily hunger and given the large majority of the poor an income supplement in return for families sending their children to school.

Still, after 8 years of Lula, the country struggles to stay ahead of its burgeoning population, the inequities of the feudal land system that cast millions into shanty towns and a murder rate in the slum favelas that is more akin to a war zone than a normal society. - It was Charles de Gaulle who once said, "Brazil has a great future. But it always will have."

He was totally wrong. At last after the major reforms of the Lula administration Brazil has a chance of building a First World society.

Brazil appears to have everything- a nation of vast dimensions, the size of Europe, bounded by the steamy tropical rain forests of the Amazon to the north and the cool, temperate, munificent, prairies to the south. No other country in the world offers such geographic contrasts or probably such an abundance of raw materials and raw opportunities. But for the best part of four centuries, until Lula came along, too much of this had been squandered- the Amazon raped, the poor exploited and the rich indulged.

Lula in political terms has been in part a lucky man. His predecessor, the right of centre, two term president, Fernando Henrique Cardoso, laid many of the foundations for future progress. So now after Cardoso and after Lula the big question is can Brazil move itself from Third World to First World? Can Brazil, the world's most successful country in terms of growth in the twentieth century, repeat this achievement in the twenty-first? Many, viewing the dismal inflation-consumed performance of the 1980s and early 1990s, with a currency adding zeros faster than the printing presses could turn, believed Brazil could never make it, especially with a former Marxist sociology professor, Fernando Henrique Cardoso, becoming president. But Cardoso practised fiscal prudence, stabilised the currency and initiated the first real reforms of Brazil's bloated bureaucracy and feudal inefficiencies. 

Lula continued where Cardosa left off. Brazil under Lula repaid its debts to the International Monetary Fund and the Paris Club well ahead of schedule. Today Brazil is running a fast growing surplus on its trade account, its exports are booming, growing at a faster rate than China's - in a range of products from Soya to aircraft from mining to computers. Its economy is growing steadily at over 7%.

Brazil is now the eighth largest economy in the world. Brazil is home to the world's largest tropical forest and Brazil has the world's largest reservoirs of freshwater and ample hydro electric power. It is self-sufficient in oil and gas and the recent deep water finds give it the prospect of being a major oil and gas exporter.

Brazil has a head start on India and China. It has been developing in its sometime madcap way for over 100 years. Between 1960 and 1980 Brazil doubled its per capita income, an achievement that was only surpassed by the later growth spurts of the much smaller East Asian countries.  Under Lula economic growth has taken another surge forward.

If this doesn't give Brazil's economy with its 170 million people quite the clout of India and China with their billion people each it certainly will give it a base to stand eye to eye with them in say ten years' time, when their growth rates will inevitably have slowed and Brazil should still be cruising at 7% or more from a much higher base. At the very least Brazil will outgrow Canada, pace Russia and leave Mexico way behind.

Now Lula is soon to hand over the baton to his impressive and experienced chief of staff, Dilma Rousseff, the likely winner in the second round of the general election- who will have Lula there to counsel and support her. She is a tough, no-nonsense, leader who has had the guile and the energy to push forward Lula’s agenda. In terms of policy, if not of sex, they are two sides of the same coin. Brazil still has many reforms yet to make- to give the tens of millions of poor more opportunities to haul themselves out of penury, to recast the impenetrable, misused, tax code, to make serious inroads on the corruption that riddles the society and to reform the bureaucratic culture that limits Brazil’s potential. If anyone can do it she can.


Jonathan Power
TFF Associate
The Transnational Foundation for Peace and Future Research
Copyright © 2010 Jonathan Power


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