What are the achievements and shortcomings of Brazil’s rapid economic growth?

Growing economy, declining underemployment rates and rising tax inflation — will Brazil be able to stay focused on the goal of economic stability? As the leading member of BRICS with an economy growing at an annual average of four percent (for the last five years) Brazil stands to struggle with inflation while attempting to maintain their rapid economic growth. In the years from 2003-2010 more than twenty million of Brazils citizens were lifted out of poverty with help from public welfare programs like ‘Bolsa Familia’ a conditional cash transfer program that issues ATM cards with monthly stipends, a program that is currently the largest targeted welfare system in the world (O’neil, 657). The downfalls of such programs is seen in the increasing tax issue that affects the citizens spending, and creates the stigma that Brazil’s economy is becoming increasingly “lethargic and expensive” (Sharma).

With the raise of the minimum wage, the inflation of public taxes and spending is one of Brazil’s rapid economic growth downfalls. The failure to expand the country’s public transit system by building roads and ports is quickly closing in on the once skyrocketing trade status of Brazil, then in turn deepening the failure to invest (Sharma). The inability for Brazil to take economic risks and its increasing spending on public welfare is having a reverse effect on the citizens that should in turn be benefitting from this growth. While focused on public welfare, Brazil continues to ignore their underspending problem with attention to their education system. While most countries see an increase in education retention rates in correlation with economic growth, Brazil however still maintains a seven year retention average, which is the lowest rate of any middle income country (Sharma). The result of poor education is showing through the working class where under qualified employees stand to be hired due to lack of engineers and technical workers.

For those that were once impoverished, the 25% increase of the minimum wage alongside the public welfare opportunities now offered the rapid growth has resulted in an ability to provide for their families. With a steady reduction of inequality and a increasing middle class Brazilian citizens thought they would see the improvement everyone was waiting for. We still see the ever increasing involvement of corruption and political unrest that is common in Latin America in Brazil, even in Rousseff’s presidency that stood to end political corruption. Overall Brazil may be leading the BRICS group, but they still face the downfalls of corruption, inflation and debt.

Works Cited

O’Neil, Patrick H. Cases in Comparative Politics. 5th ed. S.l.: W W Norton, 2015.

Articles:

https://www.foreignaffairs.com/articles/brazil/2012-04-24/bearish-brazil

http://www.wsj.com/articles/panoply-of-causes-unites-against-brazilian-leader-1439719203

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6 thoughts on “What are the achievements and shortcomings of Brazil’s rapid economic growth?

  1. An interesting phenomenon appearing to plague BRICS nations is the gross misuse of government funds for sporting events. Since 2008, BRICS nations have hosted all of the FIFA World Cups and half of the Olympic games, and are slated to host the next World Cup and two upcoming Olympics. Brazil was ‘fortunate’ enough to have been selected as host nation for both of these prestigious events, with promises of economic rejuvenation and societal improvement accompanying the successful bid attempt. It has, however, become readily apparent that the Brazilian government blatantly mislead its citizens with such grandiose promises. Rail lines scheduled to be operational prior to the 2014 World Cup still lay in disuse, despite over seven years of preparation for the event. Massive stadiums constructed solely for the World Cup now sit empty, unlikely to be used again. These are but two examples of the economic disaster the Brazilian government has created. Thus, it should come as no surprise that Brazil is currently seeing its largest protests in over a generation, as the government seems to continually ignore the fact that its citizens desperately need spending on health and educational infrastructure, not massive stadiums that will never again see a football match.

  2. Your point on education reveals an accurate failure of the Brazilian government on long-term economic improvements through effective education policies. Simply put, the top universities are so exclusive that they are impenetrable for most Brazilians (O’Neil). A strong education must be available to all. The government needs to prioritize retention and continuing education through effectual programs. If not, the substandard system will perpetuate Brazil’s underdevelopment.

  3. While I believe it is important to note that welfare programs like Bolsa Familia and a raising of the minimum wage have brought a certain amount of people out of poverty, Brazil is not as strong as it could or should be economically. Most importantly, they rely on a commodity driven system rather than an industrial one. While China has been able to grow because of a huge manufacturing base, Brazil has grown because of high commodity prices. This causes 2 problems. The first is that once commodity prices fall their economy will start to grow at a much slower pace and the funds that pay for the huge welfare state will dry up. The second issue is that with a commodity driven economic system gains generally go to the super wealthy who own the companies that drill or mine for the raw materials. If Brazil truly wants to compete on a world stage with the Untied States and other developed nations they must shift from a commodity based economy to an industrial one.

  4. It is incredibly disheartening to watch Brazil plunge into darkness after their positive social and economic growth under the rule of Luiz da Silva. Once Rousseff came into office it seems that the country has taken a turn for the worse. Inflation has shot up to a near 10%, unemployment sits close to 8%. Additionally, the nation has just faced a massive case of fraud in the finding of the Petrobras case; immense money laundering involving the government-run oil group and major banks and businesses. The article attached explains how many higher-ups in the Brazilian government were aware of the embezzlement, which in turn, put Rousseff in an incredibly negative light. On top of Brazil’s struggling economy and political reputation, the Amazon basin is becoming more polluted each day. The Amazon supplies over 20% of the world’s oxygen and being so caught up in a dissolving economy and corrupt government, the nation’s focus is taken from the importance of preserving Amazonia.

    http://www.cnbc.com/2015/08/21/brazil-has-2-kinds-of-problems-and-theyre-both-bad.html

  5. As Norman Gall, director of the Fernand Braudel Institute of World Economics in São Paulo aptly concluded, “Brazilians kept on dancing even though the music had stopped.”

  6. Brazil, like many emerging market countries, has weak political institutions (executive, legislative, and judiciary) which has made it difficult to ensure equitable distribution of the economic gains over the past 50 years. At the same time, it’s economy is one of the more diversified of all emerging markets (see auto and jet manufacturing) and there have been real advances in living standards, including for the very poor. Rather than focus on “how bad” things are, one should look to the relative gains made over the years and see the current public discontent (including street protests) as a sign of a country where democratic values are growing stronger each day. The fact that a sitting president may be impeached, and that legislative investigations by the judiciary are moving forward, both auger well for continued improvements in a country with enormous potential for future political, social and economic development. On the environmental front, there is still much work to do, but the world is watching and Brazilians themselves are pushing to protect rainforests and waterways, not just in Amazonia, but in other parts of the country as well. Again, solid steps are being taken to move forward and find solutions to problems that have existed for decades and that will not change simply because the country is in an economic downturn. Don’t count Brazil out.

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