Has Economic Growth Helped or Hindered Democracy in Brazil?

Although Brazil has expanded its presence in world markets and has steadily improved its macroeconomic stability since 2003, it is one of the weaker performers of the group. Brazil’s economic development in the last half of the twentieth century has been full of successes followed by a series of economic stagnation and decline. The Brazilian government played a great role in the country’s economic development. By being a “protectionist economy” (Sharma), the government is failing to provide the people with better economic conditions that can ideally be of even greater help to the people’s standard of living. These failures have caused a great gap in wealth distribution and economic inequality among the people; factors that are almost always the cause of societal discontent towards the government. The economic downturns caused by the government’s poor spending choices and reform policies has hindered the development of an effective democracy in Brazil.

In the past decade, the Brazilian government introduced big measures to protect local industries and businesses as well as trying to protect the people from economic turmoil. Employing protectionist methods such as high interest rates, a welfare state, high import tax, raising local taxes and protecting firms is actually hurting the Brazilian economy. The government’s “addiction to state overspending” is largely responsible for this (Sharma). A lot of money is being spent on the social safety net and not enough on local infrastructure to improve transportation, especially for farmers. And in order for the government to fund the growing safety net, social spending was increased from 20% in the 1980s to 40% in 2010. The government initiative Bolsa Familia was primarily responsible for the rise of millions of people from extreme poverty, but welfare spending can be cut and money can be allocated for other public service goods that are in need of improvements. The tax raise, which accounts for 38% of the nation’s GDP is the highest among emerging-market countries. The tax burden is already too high in comparison to other counties on the same level of development. It leaves less money for businesses to invest in training and technology, leading to slower efficiency. I have linked an article that talks about the burdens wracking the economy.3

Many Brazilians have complained of the lavish spending in preparation for the 2014 World Cup and 2016 Olympics. Instead of the money being spent on the needs of the people and society as a whole, the funds are being directed towards a small group of people, the athletes. More than a million people gathered in protest against corruption, the spiraling cost of the World Cup and to demand better public services. A protester complained, “We’re in a country where the money doesn’t go to the community, and meanwhile, we see all these millions spent on stadiums”.1 Public service such as rising bus transportation fares was a issue of discontent among many commuters and members of the working class. Although President Dilma Rousseff sided with the protesters and her popularity isn’t threatened for reelection, it is her own policies that have stoked inflation. Around 30 million Brazilians have risen from extreme poverty and escaped the middle class, but “most are still one payday from disaster”, as one article describes, and will fight for the provision of better living standards from the government.2

The government faces the challenge of meeting increasing social needs, especially after high inflation and low growth. Society is urging for better public services, such as healthcare, education and transportation, aside from local infrastructure, to promote economic growth. Social unrest will only grow if the government applies methods that do not satisfy and only worsen conditions. Without exhausting resources, the government must end protectionism, and attend to public needs by redirecting funds towards priorities. If the political agenda is shaped towards a more stable economic standing for the people, it will lead to more social participation and equality, and can greatly improve democracy in Brazil.

1http://www.bbc.com/news/world-latin-america-27811657

2http://www.economist.com/news/americas/21579857-bubbling-anger-about-high-prices-corruption-and-poor-public-services-boils-over

3http://www.economist.com/news/leaders/21586833-stagnant-economy-bloated-state-and-mass-protests-mean-dilma-rousseff-must-change-course-has

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