HAS ECONOMIC GROWTH HELPED OR HINDERED DEMOCRACY IN BRAZIL?

Although Brazil’s turn to democracy began in 1946, populism was the political order. In the years to follow, Brazil experienced a rise of Bureaucratic Authoritarianism and state-led economic development, both of which stimulated the country’s economy. In Lula da Silva’s term of office, he expanded public expenditures on infrastructures and industry as part of his plan for the Acceleration of Growth; and improved growth, higher median incomes and decreased inequality (KKJ 366-367). In 2010, Lula handpicked his successor, Dilma Rousseff.

Brazil’s economy has seen tremendous growth and success after the introduction of its own currency, the real, in 1987. In the decades to follow, we can see that there has been an improvement in income inequality and after the trauma of hyperinflation, Brazil has made a growing commitment to building a greater welfare state. The country has been a member of the world’s top emerging markets, known as the BRICS, but has unfortunately become overly dependent on their commodity products, making them a high-cost, commodity-dependent economy. In “Bearish on Brazil”, Sharma Ruchir discusses how the country has placed itself into a situation of stunted growth because of its inability to take more risks and open up the economy. Ruchir suggests that Brazil should spend less on its welfare state, simplify the tax code, broaden the tax base and modernize its inefficient pension and social security systems.

Michael Taylor in “Brazil’s Ebbing Tide” describes the country as currently being in a ‘funk’ as of result of escalating street protests, corruption scandals, frayed policies and economic worries. Taylor believes that Brazil needs more done in areas like healthcare, education and in its institutions to improve democracy in the country.

President Dilma Rousseff, who has just been sworn into her second term of office, was quoted in a New York Times article saying, “The Brazilian people want even more transparency and more combat against all types of crimes, especially corruption…and they want the arm of justice to reach everyone equally. I’m not afraid to face these challenges” (Peres). Her reelection into office does come with wary eyes just because this could, more or less, be considered a trying time for Brazil, with “a scandal at the state-run oil company, a moribund economy and less congressional support for her governing coalition” (Peres).

I do think that economic growth has hindered the growth of a stable democracy in Brazil because the country has yet to establish for itself a stable and functioning economy. With great concern that Brazil is not making the necessary changes to its imports and exports, economic growth will be on the downturn. Democracy, as Shumpeter puts it, is the ability for a country to have free and fair elections. Brazil has yet to elect a leader that has had to go against a strong opposition. However, in the New York Times article linked below, President Rousseff is ready to “to fight graft and end impunity for the rich and powerful” (Peres). With a stimulated economy, democracy can be seen in a better light. If she can help improve and make the necessary changes needed for there to be a sustainable economy, there will be better hope for a stable democracy in Brazil.

 http://www.nytimes.com/2015/01/02/world/americas/president-dilma-rousseff-of-brazil-begins-2nd-term-vowing-to-fight-graft.html

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2 thoughts on “HAS ECONOMIC GROWTH HELPED OR HINDERED DEMOCRACY IN BRAZIL?

  1. I agree with you that Brazil has hindered its own economic success. My biggest question, however, is how will the economy affect Brazil’s attempt to build and maintain a welfare state? According to John Lyons at the Wall Street Journal, the economic decline in Brazil is exposing social and economic declines, which is likely to compound with a worsening economy (Lyson, 2014). The rift caused by this stratification, he states, is likely to complicate the political landscape during elections (Lyons, 2014). The great demographic divide is likely to affect who is voted into office, and subsequently extensions or retractions of parts of the welfare state. Brazil’s welfare system appears to be a “safety net with holes”, and the patchwork of that is highly contingent on funding (Khazan, 2014). According to an article in The Atlantic, Brazilians in the wealthy south tend to live better and healthier lives than their counterparts in the northern regions, who tend to be poorer (Khazan, 2014). Furthermore. Infant mortality rates in the north are twice as high as that of the south (Khazan, 2014). This graph corresponds to a graphic in the previously mentioned Wall Street Journal Article, which depicts the economic and political divide in Brazil. The wealthier north is more likely to vote Rousseff, while the poorer south is more likely to vote Neves (Lyons, 2014). This shows the divide between classes and needs in Brazil. In order for Brazil to build the sort of safety net it needs for all citizens to benefit, more money should be pumped into the welfare state.

    The ability to fund the welfare state, which Brazil as built in spite of and sometimes at the stake of the economy, is highly dependent on funding. This issue is intensified by two reasons: corruption and dwindling economy. Although Brazil’s economy grew in the 1980s as a result of a commodity market, hyperinflation, unwillingness to enter a global and risky market, and spending on the welfare state have led to an inefficient welfare system and dwindling economy. Second, people are discontented because of perceived, and actual, political corruption. This feeling of corruption has surfaced as protests, scandals, and polarization as political parties fling mud at one another. A lack of transparency in spending, namely with the World Cups (and most likely with the Olympics as well), has led to the discontent plaguing Brazil. While China has built its economy in spite of its people’s rights, Brazil has done the opposite. While both paths are far from ideal, Brazil’s safety net is not as efficient as it should be given the money they spend on it. The issue for the new Rousseff administration is to bolster the healthcare system that is not at the expense of the hurting economy. It is also in expanding coverage and providing more equal coverage despite an economy that is not growing as fast as previous decades.

    http://www.wsj.com/articles/brazil-vote-shows-divide-between-classes-1413928998

    http://www.theatlantic.com/features/archive/2014/05/the-struggle-for-universal-healthcare/361854/

  2. I do think that the improvement in the Brazilian economy has helped the country. It has allowed the gap between the rich and the poor to lessen and it has decreased the number of unemployed. The economy grew so quickly however, that many programs and institutions could not change with it. I feel Taylor’s article is correct in saying that aspects and areas within education and healthcare, for example, were unable to improve along with the rest of the economy. The improvement in the economy has helped some of those who have been living in poverty, but not in significant ways and not across all areas. An inadequate and unequal educational system for example prevents all people in Brazil from benefiting from the strong economy. In order for Brazil to continue to experience economic growth and enable all people to experience an improvement in their standard of living, Brazil needs to focus on programs and institutions that they have been ignoring. This is what will enable Brazil to continue to grow and provide improvements for all Brazilians.

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