Brazil: Epitome of Growth Without Development

Economic development and growth are two words that should always go together. Both
are positive changes, improvements that almost all countries hope for. However, this is not the
case in the most populous and largest country in Latin America. Brazil has two faces of
development, faces that contradict each other. It has a competitive industry that coexists with a
stagnant sector and a modern agriculture coexisting with traditional practices which would mean
that Brazil is divided, that there is barrier where its development per se is not affecting all social
systems, that there is inequality. It was in the new economic view of development where we
made poverty, unemployment and inequality rates’ decline to be the criteria for a nation to be,
without a doubt, in a period of development. Brazil had a breakthrough where their economic
growth returned, health and education have improved remarkably and inequality — which is the
highest in the world, declined.
“Brazil is the country of the future — and always will be” this joke is often what Brazilians
themselves joke about their country because they are frustrated with their nation’s development.
Isn’t it strange for Brazil to be making economic and social progress with the presence of huge
equities? Well, that is because they are country dubbed to be to experience “growth without
development”. When we say “growth without development”, this means that a country may be
modernized, advanced when it comes to technology, there is increase in machinery and capital
but there is no increase in GDP per capita, quality and availability of houses is poor, low life
expectancy and etc. It’s like you can see that there are changes and improvements, but you don’t
feel it and that these changes do not reflect increase where it should. Barriers and social
divisions are a threat to any progress initiative and it just so happen that in Brazil, it is really
evident that they have social hierarchies where much attention and funds go to the rich instead of
those below.
Brazil is one of the many developing nations in 1992 that was beset in difficulties like
Russia, India, China and South Africa which the media grouped to be the BRICS. At that time,
Brazil is struggling with its debt crisis. Despite this, Brazil is the leading country in Latin America
and the Caribbean Region, and pushes for fairer international trade rules. The country has
experienced “a lost decade” for development where, with its debt crisis, there has been no
increase in income and inflation keeps rising. But there was a glimpse of hope where the
Brazilians saw signs of palpable progress with policies emerging that are meant to reduce
poverty through active programs. The economy is finally growing more rapidly despite its
inconsistency. However, the concern is whether is growth continues even though commodity
prices is high, higher than in recent years. And even with this growth, there are still issues left
unsolved like the prevalence of crime and violence which is harms the welfare of Brazil’s
constituents especially the vulnerable ones because these crimes often are committed in the
sums. As asserted, development is a gamut of change where all indicators of development
improve but this is never in the case of Brazil’s development which makes us question if it’s a
meaningful development. Brazil’s growth is not in totally because other indicators of development
lagged that undermines its growth prospects.
Brazil is part of the upper-middle income country and therefore, is expected to be in a
better position to fight extreme poverty and improve its economic equity and social indicators.
Being an upper-middle income country means having the potential to reach performance levels
with those of high-income countries by improving their physical infrastructure and logistics,
education and health care, and other social infrastructure and etc. But instead, Brazil still has a
higher percentage of its population in poverty and remains one of the countries with the highest
level of inequality in the world. So basically, for Dudley Seers, Brazil has no recent development
despite their recent improvements because nothing changed for those people in poverty, poverty
even worsened. Levels of living of the masses like reduction of poverty, unemployment and
inequality should improve if we are to talk about economic growth and development. Growth is
necessary for achieving development as these two must go together. Brazil actually is remarked
for stability when its Gross Domestic Product per capita is 1.4% in 1965-1990 and 1.5% in 1990-
2000 and this rose to 2.8% in 2000-2011. Growth is erratic and has substantial swings over time
as it spiked close to 7% in 2010. The Brazilian economy might be a vulnerable economy because
its share in manufactured exports increased to 58%, a new peak, in 2000, it has fallen steadily
since, to 45% in 2008 and in 2011, became 34%. Yes, it may just be the increase in commodity
prices but we can’t ignore the possibility of a vulnerable economy. Brazil must therefore not be
complacent and take advantage of every good opportunity.
The country continues to be a highly indebted country influenced by its debt crisis in
1980 and this took its toll in their growth performance, this is a hindrance, a drag, that is exhibited
by the continued problems with infrastructure. The issue of unemployment in Brazil is caused by
the high and growing taxes that slowed formal-sector employment growth. The burden of paying
tax increased from about 25% of gross national income to nearly 40%. However, Brazil finds
itself in the position where they have no funding because many of its labor force, half of it, is in
the informal sector where taxes maybe avoided. On the bright side, Brazil has high return of
investment according to Hausmann, Rodrik, and Velasco but lacks savings to finance
opportunities at reasonable interest rates. Hausmann added that in raising domestic savings,
“creating a financially viable state that does not over-borrow, over-tax or over-invest” is important.
We should not borrow money if we are not sure that we can raise that same amount to pay back.
We should be aware about our means so as not compromise our basic needs because we have
debts. Before investing, we have to make an informed decision because it’s a risk to over-invest
without assurance that we would have profit.
Just like how Brazil somewhat did not meet our expectations in terms of dealing with
poverty given that they are a upper-middle income country, their human development statistics
compare unfavorable with many other middle-income countries like Costa Rica. According to the
United Nations Development Programme’s 2013 Human Development Index, Brazil is in the 85 th
place but they should have been around 78 th place because of it’s predicted income. Peru,
Mauritius and Azerbaijan even surpassed Brazil. In 2011, Brazil’s life expectancy at birth is 73
years old but South Korea’s at 81 years old. It’s actually impressive that Brazil’s under-5 mortality
rate decline to 16 per 1000 live births from 36 per 1000. However, if we compare it to other
countries that are in the same league with Brazil and those less developed, ranked below Brazil,
we may be frustrated. It is because Costa Rica’s mortality rate is just 10 per 1000 live births in
similar income and 5 in South Korea. Moreover, 7% of all children under the age of 5 still suffer
from malnutrition that may be a result of poverty in Brazil. Exploitation of children or Child labor is
also rampant in Brazil. Roughly 7 million children still work even though there has been a
eradication of child labor and was actually a priority. Reported literacy rate is at 90% but their
effective literacy is only at 50% meaning. But for better analysis, Costa Rica is a country with
similar income as Brazil but their literacy rate at 96% and 6 years of school attendance is
mandatory, reported attendance is at 99%. This means that Costa Rica surpasses Brazil once
more and is showing great development in aspects of education, human development index,
mortality rate.
According to UNDP, unequal distribution of social spending is a major factor in
maintaining poverty and inequality. Basically, it is giving more attention and prioritizing the middle
classes and the rich rather than the needs of the poorest of the poor is a problem we need to
solve to fully solve the issues of inequality and poverty. With Brazil being the highest in the world
for inequality, it is no surprise that persistence is poverty is due to the inequitable social
spending. Workforce is an important element of development; a healthy, skilled and secure
workforce. Therefore, slower progress in health, education and community development means
slower rate of growth, a pace that Brazil and Brazilians are used to. Extreme poverty is perhaps
the most important social indicator for development. And poverty has been high in Brazil for an
upper-middle income country. But there were improvements according to the World Bank study
that showed that there has been a 34% in the share of poor in the population with the average
per income capita grew by 220%. The Bolsa Familia or family stipend greatly helped in the
poverty eradication movement. This government program is deemed to be successful because it
gets high remarks for addressing poverty by conditional cash transfers. The condition for
receiving this for children to keep getting vaccinated and attend school. As mentioned earlier,
Brazil has high prevalence of crime and therefore, physical security becomes a pressing
problem. There are violent gangs roaming the streets and they seem to have an extensive sway
that may lead us into thinking that there may be bribery happening in here. It is just so
unfortunate that the impact of the presence of these violent gangs are the people living in
poverty.
Inequality has been Brazil’s problem for decades, and is deemed the worst in the world.
This problem produces social strains and worst, hold back growth. Data from the 2013 World
Development Indicators reflect that high share of income is received by the highest 10% of the
population while the low share of income is received by the bottom 60%. This is actually so
strange because bulk of benefits go to those who are rich already and they don’t practically need
it the way the poor do. This inequality is the main reason for the high level of poverty and slow
rate of poverty reduction because the poor don’t get much assistance from the government
because the government focuses more on the middle class and the rich. Bolsa Familia and other
programs surely helped moderate the inequality and many government workers now receive the
minimum wage that has also reduced inequality. Inequality in assets is an issue in Brazil and in
land reform as well because large plantation owners blocked this movement because most of
them are in position and thereby, has political influence. Though there are initiatives for land
reform program, the results barely made a difference and therefore, Brazil must put more effort
into this.
It is important that if we envision the future developed, we include sustainability in the
picture. It is through sustaining the natural environment that we promise a future to the next
generation because it preserves the ecology in which the future income and people’s health
essentially depend. But the Brazilian especially those in power are apathetic to the reality of
deforestation as a pressing problem that needs prioritizing. The deforestation of the Brazilian
Amazon rainforest seems to not be alarming for those in position. However, we should commend
them for the development projects they carried out on a large scale like the subsidized ore
mining. Unfortunately, the rights of the indigenous people have been gravely violated as the best
lands became concentrated in the hands of large, powerful farmers. This could have been the
chance for farmers, indigenous people, to have agricultural lands od their own that would lessen
their burden of paying their landlord for using a certain land for agriculture, their only source of
income.
Racism is never out of the equation; it is always a variable. Accordingly, half of the
population of the Brazil is of African or of mulatto heritage. And most of the poor, those in
poverty, are the black. Racism is a crime in Brazil but no one has been sent to jail for it but it is
evidently present as the average black worker receives only 41% of the average white worker.
There is also rare chance for a black representation in the government even for a nation whose
majority are not white but black. Development encompasses these differences, this inequality.
With the upper-middle income status of Brazil as a country, it has not met most of the
expectation of it for being in that level. It is in fair distribution, equitable distribution that Brazil
would see a glimpse of what real development is because it is in paying attention to the needs of
the vulnerable, poor people that we would know what we really need to improve as they
experience the difficulties of life and have gone through it for a long time. The Brazilian
government and its constituents must put more effort into prioritizing social inclusion,
environment sustainability and human development because these are important in maintaining
a rapid economic growth leading to a genuine development.