Brazil’s rise in the past two decades to reach the status of an emerging market economy, along with the other BRIC countries, has been a great achievement, to say the least. They are now the largest economy in Latin America, and are expected to continue growing. Despite all of its achievements, problems in Brazil still persist and to understand this it is imperative to understand the large development gap going on right now. This is a problem that has been created by governments neglect for the state of its infrastructure. What this has led to is extreme differences in the standards of living, where we see it as the fastest growing regional economy, but also the nation with the region’s highest infant mortality rate.
This is a problem that has been created by governments neglect for the state of its infrastructure. What this has led to is extreme differences in the standards of living, where we see it as the fastest growing regional economy, but also the nation with the region’s highest infant mortality rate.
How has this come about? As reported by BrazilWorks in 2013, the current infrastructure deficit is the result of decades of declining public investment in national works programs. Under the authoritarian rule in the 1970s, public investment in infrastructure reached as high as 22% of investments, and 5% of overall GDP.
By 2013, however, infrastructure constituted only 2.1% of national economic activity. (BrazilWorks, 2013. Challenges and Opportunities in a Developing Region) To make matters worse, the constitution that was enacted in 1988 saw a reduction in the amount of taxation that could be used to fund public works programs, such as the development of infrastructure.
A large infrastructure gap, like the one that currently exists in Brazil, is a term for uneven development throughout any nation as a whole. As was pointed out by the IMF in 2015, the cities and highly populated areas of Brazil do have adequate infrastructure, but outside of these regions, the quality drops dramatically.
In 2014, Brazil’s level of infrastructure was rated 120 out 144 by the world economic forum, with specifically low grades in road quality. Only 15% of the country’s roads are paved. (IMF,2015. Filling the Gap: Infrastructure Investment in Brazil)
These are big problems that are creating a sharp contrast between life in the urban areas and life in the rural areas.
As was reported by the Pan American Health Organization (PAHO) for the year 2015, while 88% of those living in urban areas had access to adequate sanitation services, only 51% of those living in rural areas had the same. It is statistics like these that are illustrating the wide gap of living standards from urban to rural, as well as the limits of economic growth for the future.
Aside from the economic consequences Brazil’s lack of infrastructure has caused, it is also shortening lives and contributing to the rapid spread of diseases. Mosquito borne diseases have seen a sharp rise throughout the rural areas of Brazil due to the lack of investment in the clean water and sanitation infrastructure.
As was reported by Human Rights Watch in July, 2017 that although the 18-month state of emergency brought on from the outbreak of the ZIKA virus has ended, the population has been left just as vulnerable as it was before. This is especially true for the poor population and those living in rural areas. (Human Rights Watch, 2017. Brazil: Zika Epidemic Exposes Rights Problems) One of the major concerns about the lack of even infrastructure is the party that was in power until last year had been since 2003, and was always firmly committed to social welfare and the conditions of the working class.
The Partido dos Trabalhadores, or The Brazilian Workers Party (PT) was founded in 1980, and remained committed to its principles of building a new type of socialism based on building a united front of social movements and trade unions, as well as through purely democratic means. This was a group who broke with traditional Marxist-Leninist thought in the sense that they hoped to build a socialist revolution without an armed struggle, but through elections.
The Party’s two most famous figures, Dilma Rousseff and Lula da Silva, were instrumental in building the ideology behind their success. The group came together in the years following the end of the military dictatorship that had lasted up until the early 1980s. Both of these members were arrested, imprisoned, and tortured under the charge of subversive elements by the old regime, so the PT clearly had the revolutionary credentials to wage the struggle for democratic equality and their new vision of socialism.
In many ways, the PT was ahead of their time, starting in 1980 they began to talk about the socialist system in a way that much more resembles movement in the Post-Soviet era. Ahead of the Latin American ‘Pink Tide’ and its figures, Lula was presenting a plan for achievable social change through voting. Providing inspiration for the late El Comandante Hugo Chávez, Evo Morales, and Rafael Correa, for their later brand of democratic Bolivarianism. Lula ran for President twice before he was finally elected in 2003. Each time Lula ran for the Presidency, his program became less about radical social change, and more about the continuation of the current system with a goal of continuing Brazil’s movement towards becoming a global economic power. By 2003, the word ‘socialism’ had been completely removed from the PT’s manifesto, and this was the year that Lula finally succeeded in winning the Presidency.
The PT in government differed drastically from how it had presented itself early on. Just prior to the election, George Soros had offered an opinion that Lula would be a negative force for the period of growth Brazil had been experiencing. This then prompted Lula to pen a letter to the nation, in which he declared that from an economic standpoint, the direction of the country would carry on in the same direction. He was not proposing any plans for redistribution of lands or price controls, or anything groundbreaking.
Under Lula, the country continued its economic rise and measures were put in place to ensure that there were benefits to those in need. He took a social democratic approach to leading, where the forces of capital gains were given room to operate, but social welfare was also on the agenda for the country.
The Brazilian economy’s rise has been led by commodity and raw resource exports. This does mean that a lack of demand for Brazilian exports around the world means an economic slump at home. As reported in BRICS Business Magazine, through the 2000s, when China’s domestic market began to grow, the demand for Brazilian soybeans rose 116%. The opening of this market gave a 227% rise in international commodity prices because of the emergence of a Chinese consumer class. So Lula’s time in office was a very good time for Brazilians across the board.
As The Economist reported between 2002 and 2009, Lula’s years as President, the number of citizens living in poverty dropped from 26.7% to 15.3%. But the one place where opportunities were missed for creating a better nation for the future, it was in the category of infrastructure investment. Instead, Lula, and then later on Dilma Rousseff, took the neoliberal approach to funding. Teaming with the private sector with special tax incentives, they hoped to use market forces as a way help bring this about in a cheaper way to the state.
Brazil missed a giant opportunity by not investing the massive amounts needed in their infrastructure when their economy was booming. Now, the economy has slowed down in large part because of the downturn in the Chinese economy and the lower demand for commodities.
The idea that Lula put forth in 2007 was called the Growth Accelerated Program (PAC) and was planned to bring about advancements in infrastructure by offering out government contracts to private companies. The first one dealt with the highway systems, expanding the electrical grid, empowering the energy sector, and building subsidized houses. PAC II was enacted by Lula in 2010 when the country was preparing to host both the Olympic Games and the World Cup. But as shown above, the state of Brazil’s national infrastructure remains poor. This is a case of a government failing to provide a basic standard of living to a lot of its people.
What makes this even worse is that it is the Worker’s Party, a party who supposedly fought for the interests of the common people, left so many in danger of disease. This may never have been fully realized had it not been for the catalyst of the Zika virus. It brought the world’s attention to the poor state of drinking water and sanitation facilities that many people were living with. The worst part about this whole health crisis is that it could have been, and should have been, resolved long ago.
Let us not forget that this problem is bigger than simply just the policy of the Worker’s Party, the problem instead lies with the current economic ideology that is in place over the world. It is one that favors private investment over public, and the problem with this is that private investment is never guaranteed.
Adam Smith’s concept of the ‘Invisible Hand’, where the public good is fulfilled by private investors who are trying to exploit a gap in the market that needs filling and is done so for a personal drive for profit, is seen here to be flawed. This then leads us to the major flaw within the capitalist system as a whole, if there is no offer of a benefit for a private citizen to increase the public good, then the need doesn’t get filled.
There is no real economic incentive for upgrading the quality of drinking water and sanitation service, and therefore it is suffering. Other infrastructure, such as roads and electricity grids which give real profit opportunities, overshadow these badly needed upgrades.
In the Grundrisse, Karl Marx said that “It is not the individuals who are set free by free competition; it is, rather, capital which is set free.” And this is very potent today, as free markets have successfully given many people in Brazil the freedom to die, to become disease ridden, to suffer, and to have their security net ripped from beneath them.