Brazilian success is being vastly praised inside and outside the country and there are good reasons for this. In the last two decades, the Brazilian economy not only conquered the hyperinflation of the 1980s, but also reduced poverty by almost 70% since 1994.
Due to stabilization, economic growth and social policies, the old social pyramid – that many generations have learned in schools as the class representation in Brazil – has now been replaced by a diamond-shaped picture, showing the recent and huge increase in the country’s middle class.
At the same time, the Brazilian democracy survived the transition period from the military rule (1964-1985) and shows itself today as a very mature and solid regime – in spite of the constant challenge of corruption scandals.
In a moment when Europe and the United States are not in good shape, Brazil’s future and potential may look even brighter. After all, this is a large western multicultural democracy with no religion disputes.
However, the path to Brazilian success seems to be guarded by the two faces of Janus – one looking to the future, the other to the past. Some new and old problems persist and this is especially important for the world in terms of identity and example. If one has to lead, it would be better to do so as an example of positive values to the global community – as Europe and the US once were.
Indebtedness is a new and old problem for the country. Brazil was once notorious for its foreign debt and the Brazilian population has always experienced difficulties in saving due to the country’s historical economic instability.
However, a current representation of traditional Brazilian financial mismanagement is the high level of indebtedness of its families, which reaches 65% on average in the main cities of the country.
In Curitiba, for example, the capital of the state of Paraná, the average level of indebtedness of its families – according to the Brazilian Federation of Commerce – has reached 88%. In Natal, the capital of Rio Grande do Norte, 40% of the family income is, on average, committed to debts.
In the last year, 10 Brazilian states (of the 26 plus the Federal District) were showing levels of indebtedness of its families beyond 70%. In 2011, at least 15 states are in the same situation, and we already have some months ahead.
Consumerism is probably a new problem, due to the millions of new consumers that are now reaching the Brazilian market. At least two negative consequences may lie ahead: an economy very dependent on families’ consumption (and of the government also) and an environment in risk due to a rapid economic growth and industrialization.
Brazil is now the fifth largest market for cars in the world – and growing. In 2011, Brazilian families are expected to consume US$ 1.5 trillion, US$ 150 billion more than in 2010.
Not by chance, obesity is also growing, and fast. According to the ministry of health, 11.4% of the population suffered from obesity in 2006. In 2010, this number grew to 15%. Almost half of Brazilians are now overweight. In the next 10 years, this will rise to 60% of the population.
Inequality of opportunities is a very old Brazilian problem. Although the income gap is (slowly) diminishing – the country is still in the top 10 for the world’s worst income distribution.
This aspect is particularly prominent in Brazil’s educational system: a report published last year by the Organization for Economic Co-operation and Development (OECD), evaluating students from 65 countries, placed Brazil in 53rd position, with 401 points.
However, if one looks closer at the report, the situation is worse than it appears, since students from Brazilian private schools have reached 502 points, on average, while those from public schools only 387.
The tragedy lies in the fact 85% of Brazilian students are in public schools and the country’s tax revenue reached 35% of GDP in 2010. Brazilians pay more in taxes than the Australians and almost the same as the Spanish and the Canadians yet receive much less not only in public education but also in public security, healthcare and access to justice.
Brazil’s recent success is not leading the country to a welfare state, as many in Europe and the US think. In fact, this has been a capitalist revolution; a market-oriented transformation in an industrial, centralized society marked by bureaucracy and motivated by materialism and consumerism. Let’s hope reason comes with time.
Arthur Ituassu is professor of international relations at the Pontifícia Universidade Católica in Rio de Janeiro, Brazil. You can read more from him at his website: www.ituassu.com.br. This article appeared originally in The Guardian’s Comment Is Free.