BRAZIL: Pacing Global Economic Leveling!
Leroy Knevil
Brazil's in the vanguard of the economic global leveling that many of
us predicted years ago.
By 2030, fully one-half of the world's population will have attained
what we call middle class today.
Whatever that is.
============
"Booming economy, government programs help Brazil expand its middle
class"
By Juan Forero
Washington Post Foreign Service
Sunday, January 3, 2010;
RIO DE JANEIRO -- Teresiña Lopes Vieira da Silva peddles spices and
peppers from a street stall, but hers is no fly-by-night business.
She sells to restaurants in Rio's swankiest districts and sees her
success reflected in the two houses she has bought. Instead of
scraping by, she has joined the middle class in an increasingly
affluent Brazil, her accomplishment made possible by government loans
and a booming economy.
"Now I live in a house with six rooms," said Vieira da Silva, 62,
speaking of her home in Rocinha, a poor but bustling district with
growing ranks of entrepreneurs. "It does not have a pool yet, but I am
planning to build one."
Once hobbled with high inflation and perennially susceptible to
worldwide crises, Brazil now boasts a vibrant consumer market,
investment-grade status for its sovereign debt, vast foreign reserves
and an agricultural sector that is vying to supplant that of the
United States as the world's most productive.
Brazil's $1.3 trillion economy is bigger than those of India and
Russia, and its per-capita income is nearly twice that of China.
Recent discoveries by Brazil's state oil company are expected to make
the country one of the world's biggest crude producers. An unwieldy
bureaucracy and red tape have not slowed foreign investment, which at
$45 billion in 2008 is three times as much as it was a decade ago.
Economists and social scientists here say that the booming trade-
oriented economy, coupled with innovative government programs, is
lifting millions from poverty and shaking what was once a certainty:
that a person born poor in Brazil would surely die poor.
Since 2003, more than 32 million people in this country of 198 million
have entered the middle class, and about 20 million have risen above
poverty, according to the Center for Social Policies at the Getúlio
Vargas Foundation, a Rio policy group that studies social and economic
trends.
"We can generate inclusive growth as probably no other country can,
given the scale of the country and the level of inequality," said
Marcelo Neri, chief economist at the center. "Brazil is following what
you may call a middle path. We are respecting the rules of the market
and, at the same time, we are doing very active social policy."
Since 2002, a commodities boom has fueled strong growth and lowered
poverty across Latin America. But Brazil's progress is perhaps the
most notable because it has far more poor people than any other South
American country and has long been one of the world's most unequal
societies.
Neri said Brazil has made solid progress by creating 8.5 million jobs
since 2003 and instituting programs such as food assistance for poor
families and low-interest credit for first-time home buyers and small-
business owners.
The change has been tangible to people such as Thiago Firmino, 28, a
teacher. He has lived in a poor neighborhood all his life, but he owns
a car and a computer and says his son's life will be easier than his.
"A lot of people improved their lives," he said. "It is not like they
built themselves a castle, but, you know, they have taken little steps
and made things better."
The foundation of today's success was laid during the administration
of Fernando Henrique Cardoso, an academic-turned-politician best known
for taming inflation in the mid-90s. The man who has gotten much of
the credit is his successor, President Luiz Inácio Lula da Silva, who
once railed against globalization as a union activist.
Lula's election to the presidency in 2002 sent shudders through
Brazil's economic elite, who worried that the former rabble-rouser
would lead the country down the same populist, anti-capitalist path as
Venezuelan President Hugo Chávez.
Lula did make ending poverty a priority, but he also proved to be a
market-friendly steward of the economy and is popular today among
Brazil's business community.
With Asia hungry for soybeans, beef and iron ore, economic growth in
Brazil averaged 4.2 percent from 2003 through 2008, a year in which
foreign investment in the country posted a 30 percent increase over
2007, according to the U.N. Economic Commission for Latin America and
the Caribbean. The worldwide economic crisis led to a brief downturn
here, but economists say Brazil will post 5 percent growth in 2010.
At SulAmérica Investments in Sao Paulo, Marcelo Mello, vice president
of asset management, said investors in the past worried about
inflation and high interest rates.
Now, driven by increasingly affluent Brazilian investors, Mello said,
SulAmérica is managing $9 billion, three times the amount from five
years ago. "Through the increase in real income over the last 10
years, we've seen a huge movement in our Brazilian fund industry and
the Brazilian markets," he said.
The country's stock market is minting record numbers of billionaires,
and the wealth in Brazil is palpable. Luxury apartment houses are
rising in fashionable districts, and the world's most exclusive
stores, from Tiffany's to Gucci, consider Rio and Sao Paulo fertile
markets.
Of course, most of Brazil's people are far from rich. In the country's
vast urban slums, many youths turn to drugs, the quality of public
schooling is poor and basic services such as health care are
chronically underfunded, residents say.
"Can you believe this serves 150,000 people?" said Flavio Wittlin, who
runs a group that helps get young people off the streets, as he walked
through a tiny health center in Rocinha. He said a range of services
in the district, from garbage pickup to policing, are substandard.
Still, Rocinha is chock full of machine shops and small stores, many
of them spurred by government loans.
Although Brazil's giant industries attract investors and headlines --
such as the airplane maker Embraer and the mining giant Vale -- the
future is also rooted in businesses like Alan Roberto Lima's sewing
shop.
The shop, on the second floor of his house in a hardscrabble
neighborhood on Rio's outskirts, has only a half-dozen sewing
machines. But Lima, 34, has in a few years found that Rio's upscale
boutiques are a ready market for his skirts and blouses.
Now he talks of his own clothing line and, if that is a success, of
opening his own store.
"Preferably," he added, "near the beach."
http://www.washingtonpost.com/wp-dyn/content/article/2010/01/02/AR2010010200619.html?hpid=topnews
Arky Bob
> Brazil's in the vanguard of the economic global leveling that many of us predicted years ago.
Sounds like a case of free enterprise.
Morcegao
> The foundation of today's success was laid during the administration
> of Fernando Henrique Cardoso, an academic-turned-politician best known
> for taming inflation in the mid-90s. The man who has gotten much of
> the credit is his successor, President Luiz Inácio Lula da Silva, who
> once railed against globalization as a union activist.
>
> Lula's election to the presidency in 2002 sent shudders through
> Brazil's economic elite, who worried that the former rabble-rouser
> would lead the country down the same populist, anti-capitalist path as
> Venezuelan President Hugo Chávez.
>
> Lula did make ending poverty a priority, but he also proved to be a
> market-friendly steward of the economy and is popular today among
> Brazil's business community.
Fascinating, really, how Brazil's "Little Squid" has managed to
maintain His left-populist appeal to the masses while abandoning 90+%
of the anti-capitalist platform on which He was elected. I suspect
that, just like Obama, there is a powerful behind-the-curtain cabal of
world-savvy manipulators pulling his strings and restraining most of
His Chavesian natural impulses.
Also surprising, given His overwhelming popularity, that there has not
been a major "grass roots" campaign to amend the Constitution to
permit Him to stand for re-election as President of the Republic.
Hard to see how His colorless, non-charismatic chosen successora,
Dilma, will be able to carry the torch without dropping it on her
(big) feet.
^^;;^^
Demon Buddha
Not sure this is so. Question is whether Brazil is a free market or
rigged. I suspect the latter, but who knows.
Hegel
the global crisis arising from the free market. Brazil has to follow
China's example
The crisis in Brazil occurred only in multinational free market. Even
though Brazil is not fully opened and the state is present in the
economy, would have otherwise been a disaster
Hegel
Beam Me Up Scotty
The problem was who controlled their economy not what kind of economy it
was, because the USSR also went bankrupt.
What happened in both cases was they spent more than they could produce,
so no matter what system you point to, when they are under a government
that decides they can spend their way to prosperity, they will all fail.
Governments that don't respect the basic accounting principals and
choose some pointy head theory of economics are the ones that fold up
and go away.
Hegel
presence in the economy and not only help the economy after the
bankruptcy and abuses of the free market. After the disasters in
neoliberalismom no other hypocrisy accounting will head the company
lost money ...
Rod Speed
> Hegel wrote
>> Brazil to grow in truth can not be free market, not to become part of the global
>> crisis arising from the free market. Brazil has to follow China's example
>> The crisis in Brazil occurred only in multinational free market.
>> Even though Brazil is not fully opened and the state is present
>> in the economy, would have otherwise been a disaster
> The problem was who controlled their economy not what kind
> of economy it was, because the USSR also went bankrupt.
Nope, just went thru a period of economic mess.
> What happened in both cases was they spent more than they could
> produce, so no matter what system you point to, when they are under a
> government that decides they can spend their way to prosperity, theywill all fail.
Wrong again. That is precisely what the US did in the great depression and WW2.
> Governments that don't respect the basic accounting principals
They dont apply to govts, and you are so stupid you havent even noticed.
> and choose some pointy head theory of economics are the ones that fold up and go away.
How odd that the US hasnt.
Hegel
presence in the economy and not only help the economy after the
neoliberalism, who lost money will no longer believe in any theory
book free market, recklessly abused, cruel and inhuman