Is Brazil’s social/economic miracle running out of steam just as the World Cup arrives?

June 4, 2014 2 By Duncan Green

Is Brazil’s shambolic preparation for the World Cup a symptom of a deeper malaise? Oxfam researcher Katherine Trebeck (@ktrebeck) reflects on a recent visitKatherineTrebeck

I bandy about the term ‘economic model’ quite a lot, usually prefaced by the word ‘broken’ in reference to the UK’s purported economic recovery.

But the UK is not alone in meriting a derogatory descriptor.  In a recent trip to Brazil I heard people talk of Brazil’s economic model as ‘unsustainable’, ‘exhausted’, and ‘full of tensions’.

Brazil is certainly talking a good game – the government regularly hosts delegations of people wanting to learn more about Bolsa Familia, one of the largest welfare mechanisms in the world. It combines cash transfers with conditionality. Brazil’s 1988 constitution affirmed an array of social rights and poverty is certainly on the political agenda in a way that should make other countries ashamed. Officials are rightly proud of Brazil’s achievements to date in reducing inequality and heading towards eradication of hunger.

On the environmental front Brazil is receiving accolades for protecting the Amazon and using hydropower to fuel its growing economy.  And people looking for examples of new democratic spaces often cite Brazil’s Public Prosecutor’s Office (which acts as a ‘fourth power’ or ombudsman); the councils and conferences (some of which come with decision making power and budget responsibility); and, somewhat inevitably, participatory budgeting.

But the extent to which Brazil’s hype merits all this attention is debatable when deep inequalities remain (still twice the OECD average in terms of income and even worse in terms of entrenched inequalities of wealth) and when large tracts of land are held by just a few powerful families (Brazil has the greatest land concentration in the world).

Brazil is going through a ‘reprimarisation’ as primary sectors grow with Brazil’s globalisation and increasing sales to China and India. But this has meant that other interests (including those of indigenous communities) are forced to make way for expanding oil extraction, big agribusiness and other ‘mega projects’ such as dams and mining.  The environment seems rarely protected – an official from an international agency told me that after the Rio+20 conference ‘everyone forgot about the environment’. And deforestation rates are reportedly increasing again.

Brazil World Cup protestsYes Brazil has achieved admirable and impressive reductions of income inequality (in no small part due to programmes like Bolsa Familia, but also, and more substantively, increases in the minimum wage, pensions and formalisation of the economy). Yet government officials seem reluctant to talk about wealth inequality – perhaps because this would entail challenging vested interests and powerful players (land concentration has increased in the last decade). The rich benefit from exemptions and many evade tax. Race pervades inequalities: the average income of white people is almost twice that of Afro-Brazilians and there are large gaps in life expectancy.

Brazil’s social model is narrow and focuses on basic needs. It is confined to pursuit of a buccaneering economy from which some money can be diverted to social programmes. People seem more interested in being consumers rather than citizens (there are even shopaholics groups forming!). Consumption is seen by the more powerful ministries as the driver of the economy: competition and attraction of capital is the goal.

The Mayor of Sao Paulo, Fernando Haddad, has observed: ‘stepping from the street into your house, a lot has improved in our country; but stepping from your house to the street, nothing has been done’.

The education and health sectors are increasingly subject to privatisation, with middle classes purchasing healthcare and schooling. This risks leaving a rump of underfunded public services: the poor quality (and expense) of state-provided health and education was a key factor in large protests in 2013 (calling for, inter alia, ‘FIFA standard education and health’).

The innovation of the Public Prosecutor’s Office seems broadly welcome, but people warn of a ‘judicialisation’ of social problems. People I spoke to are cynical about the potential of participatory budgeting to be genuinely transformative (and activists say decisions that go against government policy or powerful economic interests are not adopted). There are warnings that democratic structures have ‘run out of steam’ as political capture and patrimony persists, the extreme right gains in power and Congress remains dominated by agribusiness and evangelical conservative MPs. And while the poorest households have larger share of national income than before, this hasn’t translated into greater political voice.

And of course there is the violence. Almost 50,000 people die every year due to homicide and violence. Some campaigners have been murdered for BolsaFamiliaCardspeaking out about rights of rural communities and domestic violence is widespread: a woman is battered about every 24 seconds.

Such contradictions are mirrored by tensions amongst social justice campaigners: between those who defend Brazil’s ‘neodevelopmentalist’ model because it pays for undeniably important social technologies and those who worry that this is merely defending crumbs from a broken system. It is likely that Brazil’s successful policies and inventions are being undermined by structural problems – increases in minimum wages and cash transfers will never be enough when structural reform, progressive fiscal changes and land reform is so urgently needed. Being realised in the face of bigger challenges, Brazil’s achievements to date seem akin to running up the down escalator.

And here’s last year’s viral protest video ‘No, I’m not going to the World Cup’