As a Young Democracy Isolated from the World, Brazil Doesn’t Enjoy the Perks of Globalization

Brazil is a young democracy. This is not a criticism or an excuse, but an observation.

While the country has had several democratically elected presidents in the 20th and 21st centuries, for most of Brazil’s history, wealthy land barons, so-called coronéis, have guided Brazil’s political and economic path directly or indirectly through their extensive influence.

Today, democracy is entrenched in Brazil after replacing the military government that controlled the country for two decades until the mid 1980s. Nevertheless, the remnants of the coronéis are still in play.

The evidence that oligarchs control vast empires in Brazil can be seen in the Lava Jato scandal and the numerous other investigations that have sprouted out of the plea bargain testimonies (delações premiadas) taken during the criminal proceedings.

Some of these oligarchs are being convicted and placed under house arrest or sent to prison, such as billionaire Marcelo Odebrecht and Eduardo Cunha, the ex-Speaker of the House and formerly one of Brazil’s most powerful politicians.

NGO Oxfam Brasil reports that the accumulated holdings of Brazil’s six wealthiest men is equal to the assets of half of Brazil’s population (100 million people). Brazil remains one of the worst countries in the world for income inequality.

Along with income inequality, other remnants of Brazil’s 19th century monarchy are evident, such as the country’s heavy import taxes and Byzantine tax structure. Brazil continues to prevent foreign competition from entering the local market. The World Bank ranks Brazil 123rd of 190 countries for “ease of doing business.”

As the philosopher George Santayana famously noted, “Those who do not learn history are doomed to repeat it.” The future of a country is dependent on its ability to learn from its historical errors.

The US has spent two hundred years distancing itself from the British monarchy that once ruled it. Brazil’s young democracy has been fully functional for a mere 30 years.

What does it mean to be young? When an individual is young, s/he makes bad decisions. Logic, experience, and delayed gratification are required to make informed decisions.

Actions that require advanced judgement are less likely to arise in children. An adult learns to make decisions based on long-range objectives. Maturity encourages us to exercise self-discipline, to forego indulgences now to produce a desired result in the future.

When children or adolescents make mistakes in judgment they are not to be blamed for their lapses. We do not hold children accountable for things they can’t be expected to grasp yet. No one can understand what s/he doesn’t know. A young democracy makes mistakes in judgment as well.

Brazilians are known for their spontaneity and creativity, sometimes referred to as the jeitinho brasileiro. Even the US still exhibits signs of its “youth,” e.g. egotism and a self-centered lack of foresight or international empathy.

In Brazil, youthful exuberance is on view everywhere from football matches to personal grooming. The country is the cosmetic surgery capital of the world. The long hair characteristic of little girls and adolescents in Western countries is popular among Brazilian women.

Facial hair on men is a new fashion. Demographically, Brazil, like most developing countries, is younger than developed countries. The majority of the population is under 30, whereas in the US, the majority of the population is over 30. Brazil is demographically young in addition to being a young democracy.

Brazilians are protective of their leisure time. Parties are a priority, whether it’s birthday parties with family members or drinking at the bar with colleagues after work. As one Brazilian told me, “A party is life.”

Catholic holidays are national holidays, so there are twice as many federal holidays than in the US. The Brazilian Constitution guarantees all workers 30 days of paid vacation per year, plus additional time off employees can accept or trade for cash.

There is no such vacation stipulation in the US Constitution. In the summer months, commerce slows as people work less and spend time at the beach with their families.

Another characteristic of a young democracy is xenophobia. In Brazil, only 1/3 of one percent of the population are foreign residents. Xenophobia is not surprising in a country that is attached to old customs.

Fear of outsiders is a basic human instinct like fear of the unknown. A young country makes mistakes, just as a child’s lack of experience may place the child in harm’s way, making decisions based on fear and short-term goals.

In the 21st century, thanks to trade agreements among nations, global commerce is the key to economic strength and stability. Xenophobia is bad for business.

A country that remains economically isolated is not situated for future growth, not to mention the resentment created among the populace toward the government when it’s forced to pay exorbitant taxes on all imported goods.

During the World Economic Forum, Brazil’s Finance Minister Henrique Meirelles stated that his country remains an isolated economy and hasn’t enjoyed all the perks of globalization.

Whether your politics are capitalist or socialist – favoring unrestricted movement of money or government regulations that exercise controls to combat income inequality – either way, countries require enormous capital to operate, the more the better.

A wealthy nation like the US with unrestricted capitalism offers large corporations and banks a guilt-free environment, allowing them to flourish until they reach the status of “too big to fail,” which guarantees them government protection from financial destruction.

So-called “neoliberal” economic policies offer low unemployment and low inflation until they reach a tipping point, such as the global recession of 2008.

On the other hand, a wealthy country like Norway, rich from oil exports, uses its wealth to guarantee a comfortable living standard for all its citizens, including excellent education and healthcare systems. University education is free to everyone in Norway, including international students.

The economic health of a country is measured by its GDP (Gross Domestic Product). When a country slips to zero or negative GDP growth (in Portuguese, PIB), it’s a recession, as happened in Brazil in 2015 and 2016.

GDP is calculated by measuring the percentage of growth the overall economy has shown compared to the previous year. Therefore, positive GDP numbers only occur if the latest data exceeds the previous data, i.e., if this year’s economy grows more than it did last year.

Hence, a country’s overall economic outlook is only considered healthy if it exceeds the previous year’s. The measuring stick is continual growth. A country that doesn’t show economic growth in each successive year is considered unhealthy and possibly unstable, depending on what measures politicians take to stimulate the economy.

Negative GDP numbers are devastating to a country. The numbers become the headline of every report on the evening news. Weak numbers often predict political instability, as seen in Brazil today. Negative GDP figures affect stock market values and real estate values; they also directly affect the amount of foreign investment.

Harder to calculate but easily visible, slower growth has an unambiguous effect on the psychological well-being of a country. When citizens believe their country’s economy is in danger, they are less likely to spend money.

When purchases stop or are delayed, a ripple effect echoes through every stratum of the country. It can sometimes be measured with an economic indicator known as the “consumer confidence rating.”

As with all youth, whether it’s children or a young democracy, missteps are inevitable. Luckily, Brazil’s economy is growing again this year, and the government would be wise to improve opportunities for entrepreneurs, making it easier to do business.

Additionally, it’s imperative to ease Brazil’s isolated economy. An economic plan that incorporates a global vision means long-term political stability for the country. However, this must be maintained within the framework of environmental sustainability.

Without a sustainable environment, there will be nothing to maintain. Stability and sustainability, along with prison terms for the corrupt oligarchs, is the key to Brazil’s vigor. The country’s future lies in the hands of the young, and with their diligence and care, democracy will continue to flourish.

B. Michael Rubin is an American living in Brazil. He’s the editor of the online magazine, Curitiba in English – http://curitibainenglish.com.br

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It seems the future never arrives in Brazil What Lies Ahead in Brazil? Brazil Has No Exemplary Past or Present. But What Lies Ahead for the Country? Europeans, US, developed country, developing country. Bolsonaro, future B. Michael Rubin For years, experts have debated what separates a developing country from a developed one. The GDP (Gross Domestic Product) of a country is one simple way to measure its economic development. Another way to measure a country's progress is the extent of public education, e.g. how many citizens complete high school. A country's health may be measured by the effectiveness of its healthcare system, for example, life expectancy and infant mortality. With these measurement tools, it's easier to gauge the difference between a country like Brazil and one like the U.S. What's not easy to gauge is how these two countries developed so differently when they were both "discovered" at the same time. In 1492 and 1500 respectively, the U.S. and Brazil fell under the spell of white Europeans for the first time. While the British and Portuguese had the same modus operandi, namely, to exploit their discoveries for whatever they had to offer, not to mention extinguishing the native Americans already living there if they got in the way, the end result turned out significantly different in the U.S. than in Brazil. There are several theories on how/why the U.S. developed at a faster pace than Brazil. The theories originate via contrasting perspectives – from psychology to economics to geography. One of the most popular theories suggests the divergence between the two countries is linked to politics, i.e. the U.S. established a democratic government in 1776, while Brazil's democracy it could be said began only in earnest in the 1980s. This theory states that the Portuguese monarchy, as well as the 19th and 20th century oligarchies that followed it, had no motivation to invest in industrial development or education of the masses. Rather, Brazil was prized for its cheap and plentiful labor to mine the rich soil of its vast land. There is another theory based on collective psychology that says the first U.S. colonizers from England were workaholic Puritans, who avoided dancing and music in place of work and religious devotion. They labored six days a week then spent all of Sunday in church. Meanwhile, the white settlers in Brazil were unambitious criminals who had been freed from prison in Portugal in exchange for settling in Brazil. The Marxist interpretation of why Brazil lags behind the U.S. was best summarized by Eduardo Galeano, the Uruguayan writer, in 1970. Galeano said five hundred years ago the U.S. had the good fortune of bad fortune. What he meant was the natural riches of Brazil – gold, silver, and diamonds – made it ripe for exploitation by western Europe. Whereas in the U.S., lacking such riches, the thirteen colonies were economically insignificant to the British. Instead, U.S. industrialization had official encouragement from England, resulting in early diversification of its exports and rapid development of manufacturing. II Leaving this debate to the historians, let us turn our focus to the future. According to global projections by several economic strategists, what lies ahead for Brazil, the U.S., and the rest of the world is startling. Projections forecast that based on GDP growth, in 2050 the world's largest economy will be China, not the U.S. In third place will be India, and in fourth – Brazil. With the ascendency of three-fourths of the BRIC countries over the next decades, it will be important to reevaluate the terms developed and developing. In thirty years, it may no longer be necessary to accept the label characterized by Nelson Rodrigues's famous phrase "complexo de vira-lata," for Brazil's national inferiority complex. For Brazilians, this future scenario presents glistening hope. A country with stronger economic power would mean the government has greater wealth to expend on infrastructure, crime control, education, healthcare, etc. What many Brazilians are not cognizant of are the pitfalls of economic prosperity. While Brazilians today may be envious of their wealthier northern neighbors, there are some aspects of a developed country's profile that are not worth envying. For example, the U.S. today far exceeds Brazil in the number of suicides, prescription drug overdoses, and mass shootings. GDP growth and economic projections depend on multiple variables, chief among them the global economic situation and worldwide political stability. A war in the Middle East, for example, can affect oil production and have global ramifications. Political stability within a country is also essential to its economic health. Elected presidents play a crucial role in a country's progress, especially as presidents may differ radically in their worldview. The political paths of the U.S. and Brazil are parallel today. In both countries, we've seen a left-wing regime (Obama/PT) followed by a far-right populist one (Trump/Bolsonaro), surprising many outside observers, and in the U.S. contradicting every political pollster, all of whom predicted a Trump loss to Hillary Clinton in 2016. In Brazil, although Bolsonaro was elected by a clear majority, his triumph has created a powerful emotional polarization in the country similar to what is happening in the U.S. Families, friends, and colleagues have split in a love/hate relationship toward the current presidents in the U.S. and Brazil, leaving broken friendships and family ties. Both presidents face enormous challenges to keep their campaign promises. In Brazil, a sluggish economy just recovering from a recession shows no signs of robust GDP growth for at least the next two years. High unemployment continues to devastate the consumer confidence index in Brazil, and Bolsonaro is suffering under his campaign boasts that his Economy Minister, Paulo Guedes, has all the answers to fix Brazil's slump. Additionally, there is no end to the destruction caused by corruption in Brazil. Some experts believe corruption to be the main reason why Brazil has one of the world's largest wealth inequality gaps. Political corruption robs government coffers of desperately needed funds for education and infrastructure, in addition to creating an atmosphere that encourages everyday citizens to underreport income and engage in the shadow economy, thereby sidestepping tax collectors and regulators. "Why should I be honest about reporting my income when nobody else is? The politicians are only going to steal the tax money anyway," one Brazilian doctor told me. While Bolsonaro has promised a housecleaning of corrupt officials, this is a cry Brazilians have heard from every previous administration. In only the first half-year of his presidency, he has made several missteps, such as nominating one of his sons to be the new ambassador to the U.S., despite the congressman's lack of diplomatic credentials. A June poll found that 51 percent of Brazilians now lack confidence in Bolsonaro's leadership. Just this week, Brazil issued regulations that open a fast-track to deport foreigners who are dangerous or have violated the constitution. The rules published on July 26 by Justice Minister Sérgio Moro define a dangerous person as anyone associated with terrorism or organized crime, in addition to football fans with a violent history. Journalists noted that this new regulation had coincidental timing for an American journalist who has come under fire from Moro for publishing private communications of Moro's. Nevertheless, despite overselling his leadership skills, Bolsonaro has made some economic progress. With the help of congressional leader Rodrigo Maia, a bill is moving forward in congress for the restructuring of Brazil's generous pension system. Most Brazilians recognize the long-term value of such a change, which can save the government billions of dollars over the next decade. At merely the possibility of pension reform, outside investors have responded positively, and the São Paulo stock exchange has performed brilliantly, reaching an all-time high earlier this month. In efforts to boost the economy, Bolsonaro and Paulo Guedes have taken the short-term approach advocated by the Chicago school of economics championed by Milton Friedman, who claimed the key to boosting a slugging economy was to cut government spending. Unfortunately many economists, such as Nobel Prize winner Paul Krugman, disagree with this approach. They believe the most effective way to revive a slow economy is exactly the opposite, to spend more money not less. They say the government should be investing money in education and infrastructure projects, which can help put people back to work. Bolsonaro/Guedes have also talked about reducing business bureaucracy and revising the absurdly complex Brazilian tax system, which inhibits foreign and domestic business investment. It remains to be seen whether Bolsonaro has the political acumen to tackle this Godzilla-sized issue. Should Bolsonaro find a way to reform the tax system, the pension system, and curb the most egregious villains of political bribery and kickbacks – a tall order – his efforts could indeed show strong economic results in time for the next election in 2022. Meanwhile, some prominent leaders have already lost faith in Bolsonaro's efforts. The veteran of political/economic affairs, Joaquim Levy, has parted company with the president after being appointed head of the government's powerful development bank, BNDES. Levy and Bolsonaro butted heads over an appointment Levy made of a former employee of Lula's. When neither man refused to back down, Levy resigned his position at BNDES. Many observers believe Bolsonaro's biggest misstep has been his short-term approach to fixing the economy by loosening the laws protecting the Amazon rainforest. He and Guedes believe that by opening up more of the Amazon to logging, mining, and farming, we will see immediate economic stimulation. On July 28, the lead article of The New York Times detailed the vastly increased deforestation in the Amazon taking place under Bolsonaro's leadership. Environmental experts argue that the economic benefits of increased logging and mining in the Amazon are microscopic compared to the long-term damage to the environment. After pressure from European leaders at the recent G-20 meeting to do more to protect the world's largest rainforest, Bolsonaro echoed a patriotic response demanding that no one has the right to an opinion about the Amazon except Brazilians. In retaliation to worldwide criticism, Bolsonaro threatened to follow Trump's example and pull out of the Paris climate accord; however, Bolsonaro was persuaded by cooler heads to retract his threat. To prove who was in control of Brazil's Amazon region, he appointed a federal police officer with strong ties to agribusiness as head of FUNAI, the country's indigenous agency. In a further insult to the world's environmental leaders, not to mention common sense, Paulo Guedes held a news conference on July 25 in Manaus, the largest city in the rainforest, where he declared that since the Amazon forest is known for being the "lungs" of the world, Brazil should charge other countries for all the oxygen the forest produces. Bolsonaro/Guedes also have promised to finish paving BR-319, a controversial highway that cuts through the Amazon forest, linking Manaus to the state of Rondônia and the rest of the country. Inaugurated in 1976, BR-319 was abandoned by federal governments in the 1980s and again in the 1990s as far too costly and risky. Environmentalists believe the highway's completion will seal a death knoll on many indigenous populations by vastly facilitating the growth of the logging and mining industries. Several dozen heavily armed miners dressed in military fatigues invaded a Wajãpi village recently in the state of Amapá near the border of French Guiana and fatally stabbed one of the community's leaders. While Brazil's environmental protection policies are desperately lacking these days, not all the news here was bad. On the opening day of the 2019 Pan America Games in Lima, Peru, Brazilian Luisa Baptista, swam, biked, and ran her way to the gold medal in the women's triathlon. The silver medal went to Vittoria Lopes, another Brazilian. B. Michael Rubin is an American writer living in Brazil.

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