{"id":6629,"date":"2010-08-02T00:00:43","date_gmt":"2010-08-01T22:00:43","guid":{"rendered":"http:\/\/www.transcend.org\/tms\/?p=6629"},"modified":"2010-07-30T20:34:32","modified_gmt":"2010-07-30T18:34:32","slug":"brazil-democracy-vs-poverty","status":"publish","type":"post","link":"https:\/\/www.transcend.org\/tms\/2010\/08\/brazil-democracy-vs-poverty\/","title":{"rendered":"Brazil: Democracy vs. Poverty"},"content":{"rendered":"

In half a generation, a period that straddles two presidencies, politics has lifted millions of Brazilians from misery. Arthur Ituassu explains how it was done.<\/em><\/p>\n

Democracy and politics are winning the war against poverty in Brazil. A report published on 22 July 2010 by the Instituto de Pesquisa Econ\u00f4mica Aplicada<\/em><\/a> (IPEA) – Brazil\u2019s federal economic-research institute – reveals striking detail on the diminution of poverty in the country. It shows that in the 1995-2008 period, as many as 12.8 million Brazilians escaped pobreza<\/em> (poverty), and 13.1 million more were lifted from a deeper condition of mis\u00e9ria<\/em> (destitution). IPEA defines pobreza<\/em> according to individual earnings of less than 250 reais<\/em> [$140] per month, and mis\u00e9ria<\/em> by earnings below 125 reais<\/em> [$70] per month).<\/p>\n

There are other ways to measure<\/a> the improvement. In 1995, 43.4% of Brazilians were considered poor by IPEA\u2019s criteria, and 20.9% were living in destitution; by 2008, the respective numbers had fallen to 28.8% and 10.5%.<\/p>\n

In addition, the Gini coefficient<\/a> for Brazil – which measures economic inequality – fell from 0.64 to 0.54 in the same period (the coefficient deteriorates as gets closer to 1.0). True, income concentration in Brazil remains one of the worst in the world<\/a>, but the improvement here is significant. IPEA expects that if the trends are found to have continued in the 2009-16 period, mis\u00e9ria<\/em> will be vanquished in Brazil<\/a> by 2016 and pobreza<\/em> will by then affect only 4% of the population.<\/p>\n

A single era<\/strong><\/p>\n

But the numbers<\/a> tell only part of the story. For Brazil\u2019s democracy and institutional continuity have been vital in this impressive reduction in the country\u2019s economic inequalities. After all, the period researched by IPEA covers two two-term presidencies, those of Fernando Henrique Cardoso<\/a> (1995-2002) and of Lu\u00eds In\u00e1cio Lula da Silva<\/a> (2003-08, part of a presidency that will end in January 2011 after the elections<\/a> of October 2010). Their administrations, by working constructively during this specific historical period, are responsible for a substantial achievement that has improved<\/a> the lives of millions of Brazilians (see \u201cBrazil: democracy as balance<\/a>\u201d, 15 November 2008).<\/p>\n

The emphasis on democracy as an instrument of social progress in Brazil is justified, for the governments of \u201cFHC\u201d and of Lula were the first true democratic governments after the fall of Brazil\u2019s twenty-year military dictatorship<\/a> (1964-85). Fernando Collor de Mello was elected by the people in 1989 in the first democratic election of the new regime, but he was impeached<\/a> after two years due to corruption scandals; his vice-president and successor Itamar Franco could have only a transitional<\/a> role, albeit an important one.<\/p>\n

The political era<\/a> that oversaw these immense social and benefits began in effect in February 1994 when Cardoso – as finance minister in Itamar Franco’s administration – initiated the Real<\/a><\/em> plan<\/em><\/a> reforms, which crushed an epic inflation-rate that since 1980 had destroyed the value of Brazil\u2019s currency. The success of Cardoso\u2019s<\/a> economic policy gave him the momentum to reach the presidency and govern from January 1995.<\/p>\n

The results of this era, taken as a whole, demonstrate the complementarity of Cardoso and Lula’s governments (see “The price of democracy in Brazil<\/a>“, 21 May 2009). FHC\u2019s main purpose was to establish a stable economy, where the defeat of inflation was followed by major investments of political will and resources in the public healthcare and basic educational systems; Lula\u2019s was to enlarge direct social benefits (most famous, the bolsa fam\u00edlia<\/em><\/a>, a minimum-income project that supports millions of Brazilians) in order to create new classes of consumers, and to boost the country’s domestic industrial production.<\/p>\n

In the first six months of 2010 alone, Lula transferred R$<\/em> 7 million ($4 million) to more than 50 million people through the bolsa fam\u00edlia<\/em>. 25% of Brazilians now receive the benefit, which pays families between R$<\/em> 22 ($12) and R$<\/em> 200 ($113) a month.<\/p>\n

A Brazilian prospect<\/strong><\/p>\n

The macro perspective, however, still allows for a more detailed view where some traditional issues<\/a> of Brazil\u2019s economic-development process come into focus. Two points in particular are notable.<\/p>\n

First, poverty is being reduced at a faster rate<\/a> in Brazil\u2019s already more \u201ceducated\u201d regions. Here, in the south and southeast, poverty fell by 47.1% and 34.8% respectively; whereas in the northeast, the north and centre, it fell by 28.8%, 14.9% and 12.7% (the figures for destitution are proportionally similar). In fact, the bolsa fam\u00edlia\u2019s<\/em> impact in the northeast – historically Brazil\u2019s poorest region – accounted for its achieving similar levels of mis\u00e9ria<\/em><\/a>-reduction as the south and southeast.<\/p>\n

Second, IPEA’s research confirms that economic growth alone cannot reduce poverty and destitution. The central part of the country – Brazil\u2019s mid-west, where the capital Bras\u00edlia is located – experienced the fastest annual growth of GDP per capita from 1995-2008: 5,3% per year. At the same time, the region had the second-worst annual record in poverty-reduction: 2,3%, better only than the north\u2019s 1.6% per year. This result highlights a very powerful distortion in the Brazilian economic context: namely, the constant and disproportionate growth of the number of public employees and their salaries in relation to the marketised sector.<\/p>\n

In 2002-08, for example (according to separate research published in 2009), private-sector salaries grew by 8.7% above the inflation-rate for the period (43.3%); while salaries around Brazil\u2019s top public institutions (the presidency, congress and judicial system) grew on average by 74.2%, 28.5% and 79.3% above inflation. In February 2009, the average salary within the presidential apparatus – including all kinds of jobs – was R$<\/em> 6,691; in Brazil\u2019s private sector, it was R$<\/em> 1,154. A major consequences of this situation is the weakening of entrepreneurship among highly educated young people, who prefer the “low work-high payment-very secure” conditions of the public service than to seek adventure and risk in the Brazilian marketplace.<\/p>\n

But the results presented<\/a> by the Instituto de Pesquisa Econ\u00f4mica Aplicada<\/em> show that Brazil is at least on the right path in terms of poverty-reduction. Moreover, as I have argued in an earlier article<\/a> on openDemocracy<\/strong>, this trend is unlikely to change irrespective of who will be the winner<\/a> in the presidential election in October 2010, and assume office as Lula\u2019s successor in January 2011 (see \u201cBrazil after Lula: left vs left<\/a>\u201d, 23 March 2010).<\/p>\n

This \u201cvirtuous cycle\u201d is no less than a byproduct of major improvements<\/a> in the Brazilian political environment since 1989: a \u201cre-democratisation\u201d process, a political and economic stabilisation, and a series of international<\/a> compromises made by Brazil concerning such sensitive issues as trade, the environment, intellectual property and nuclear proliferation. It is a vivid endorsement of the value-creating, life-enhancing, society-enriching effect of sustained democratic politics.<\/p>\n

Brazil, by continuing<\/a> on this path, will most likely be in a much better shape than in the past to host international visitors during the football world cup<\/a> of 2014 and the Olympic games<\/a> of 2016. Any major problems ahead would seem to lie in the international financial and economic crisis coming from the north.<\/p>\n

___________________________<\/p>\n

<\/em><\/p>\n

Arthur Ituassu is professor in the department of social communication at <\/em>the Pontif\u00edcia Universidade Cat\u00f3lica<\/em><\/a> in Rio de Janeiro.<\/em><\/p>\n

GO TO ORIGINAL \u2013 OPEN DEMOCRACY<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

In half a generation, a period that straddles two presidencies, politics has lifted millions of Brazilians from misery. Arthur Ituassu explains how it was done.<\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[53],"tags":[],"class_list":["post-6629","post","type-post","status-publish","format-standard","hentry","category-latin-america-and-the-caribbean"],"_links":{"self":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/posts\/6629","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/comments?post=6629"}],"version-history":[{"count":0,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/posts\/6629\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/media?parent=6629"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/categories?post=6629"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/tags?post=6629"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}