Brazil’s economy is sporadic. The country has faced periods of rapid growth contrasted by abrupt economic downturns. This discord is primarily due to Brazil’s economic growth outpacing the development of democratically effective government in ensuring the longevity of such growth. Democracy was only recently consolidated in Brazil, and beforehand the country was subject to military rule. Such rule ultimately served to place most economic processes within the hands of the state (O’Neill, 632). Due to heavy state involvement in these processes, and consequently further exploitation of Brazil’s natural resources, “Military rule coincided with a period of sustained spectacular economic growth (1968-74)” (O’Neill, 633). This period of rapid economic growth, served to justify continued state involvement in these processes. Subsequently, upon the end of military rule due to an economic downturn that led to a surge in demand for democratic reform, such statist polices were not abandoned.
In the modern era, Brazil faces rampant inequality stemming from unemployment and lack of education. The current Brazilian government has sought to remedy the issue with reforms. However, although such programs as “Bolsa Familia” have been effective in combatting the issue, “the rise of the welfare state is crowding out private investment, which remains stagnant” (Lemos). Moreover, these reforms have served to increase growth on a superficial level and employers frequently resort to hiring unskilled workers due to underspending on the schools that these children attend (Sharma). These reforms also lead to increased statism and thus perpetuate the notion that increased government regulation is the sole route to combatting inequality. However, such state programs will inevitably lead to the sustained periods of hyper inflation that Brazil has faced in the past. Due to an inability to inhibit state spending, the continued benefits granted to citizens as well as consistent reliance on exporting commodities as the primary source of economic income, have only served to yet again bring Brazil to the brink of economic downturn. Consequently, due to this “Brazil’s unemployment rate is already surging, hitting a five-year high of 7.5 percent in July, largely because of settled or abandoned infrastructure projects” (Romero). Additionally, these reforms have failed to combat longstanding educational inequality. Even today, of the 8 percent of Brazilians who attend university, “two-thirds of those admitted typically come from the wealthiest 20 percent of the population” (O’Neill, 652). Lastly, among the growing middle-class present in Brazil, there has been astounding levels of job uncertainty. During the years Brazil was in an economic boom, “tens of millions of Brazilians escaped poverty and became known as “the new middle class.” Their ability to buy items like cars and flat-screen TVs for the first time further fueled economic growth” (Daily Mail). However, almost immediately after the boom all of this purchasing power seeming evaporated, and these new members to the working class found themselves unable to find jobs. This lack of stability within society due to the continued state presence within the economy exemplify how the Brazilian government is still politically underdeveloped.
O’Neil, Patrick H. Cases in Comparative Politics. 5th ed. S.l.: W W Norton, 2015.
(Lemos and Romero) https://www.foreignaffairs.com/articles/brazil/2012-04-24/bearish-brazil