Can Latin America’s largest country rise above the hurdles?
As cannons blasted confetti down upon a roaring crowd in Rio de Janeiro in October, Latin America’s largest nation celebrated its arrival on the world stage. Like China before the 2008 Olympic Games, Brazil greeted the announcement that it would host the Games in 2016 as a rite of passage into the developed world.
But just two weeks later, a gang of drug traffickers in one of Rio’s notorious slums shot down a police helicopter in a brazen attack that killed three officers. More than 100 policemen poured into the shantytown to regain control in the ensuing gun battle, which took place only a mile from the stadium in which the Games are scheduled to be held.
Even as Brazil assumes increasing international prominence, the country’s political, social, and economic development remains hampered by fundamental problems of rule of law and severe inequality. Brazil’s economic growth in the past decade has been impressive, but the country will have to to overcome hurdles of stark social inequality, violent crime, and rampant corruption to establish itself as a rising superpower and role model in Latin America.
The “B” in “BRIC”
Brazil appears to have left behind the high inflation of inconsistent growth of the 1980s and 1990s, bolstered by a new currency and an economic stabilization plan developed in the past two decades. Goldman Sachs famously classified Brazil along with Russia, India, and China as one of the “BRIC” countries in 2003, ranking it among the largest and fastest-emerging markets in the world.
Jim O’Neill, the head of global economic research at Goldman Sachs who coined the term, told the HPR that Brazil has shown new promise. “Its ability to bounce back post-crisis, the decline in real interest rates, low and stable inflation, the amount of [foreign direct investment] building up in the ‘new’ Brazil, and its commodity richness” set the stage for sustained long-term growth, O’Neill explained. Brazil has experienced an average annual growth rate of nearly 5 percent in the past three years, and according to O’ Neill, is expected to be “stronger in the next decade than the last.”
Other experts echoed O’Neill’s optimism, citing Brazil’s stable government as an indicator of continued economic success. In an interview with the HPR, Filipe Campante, professor of public policy at the Harvard Kennedy School, attributed Brazil’s economic expansion to “institutional maturity” and “a consolidated democracy that has created more political stability.” Kevin Casas-Zamora, a Latin America expert at the Brookings Institution told the HPR that over the past fifteen years, the government – led by two strong presidents in a row – has instituted important reforms to ensure “well-functioning political parties and an effective Congress.” These institutions provide Brazil with a solid foundation to sustain future growth.
Crime, Slums and Corruption
Despite this foundation, while Brazil has developed a strong, commodity-driven economy, such improvements have not translated into a broad distribution of wealth. Those living in the northeast region, for instance, have a per capita income that amounts to less than half the national average. Casas-Zamora noted that “regional imbalances in Brazil are huge because while the northeast of the country is at the level of development of sub-Saharan Africa, the Southern part is comparable to Southern Europe.” Campante noted that many “have no access to basic goods, services, and education.” These troubles are hardly the mark of a highly developed economic powerhouse.
The problems of crime, violence and corruption in the slums, or favellas, dominate headlines about the breakdown of social order within Brazil’s major cities. There is a total lack of state control in many of the favellas, and the poorest neighborhoods are easily overrun by drug lords and mafias. Corrupt local police often fight gangs for the right to exploit the slum dwellers. James Roberts, research fellow at the Heritage Foundation, told the HPR that Rio in particular “is a dangerous city that certainly needs improvement and investments” before the Olympics arrives. David Samuels, professor of comparative politics at the University of Minnesota, told the HPR that most Brazilians point to crime as the biggest problem, followed closely by corruption. With a “dysfunctional” judicial system in which criminals can “buy their way out of charges,” Samuels said, Brazil is a long way from untangling this web of crime and corruption and strengthening rule of law.
A Way Forward: Education, Reform, and Transparency
Brazil may, however, be able to find a way forward through greater investment in education and the creation of a social safety net. “The faster Brazil grows and the richer it becomes, the more glaring becomes the fact that there are people who are extremely poor,” Campante explained. Unlike Mexico, said Samuels, Brazil has “a first world tax system.” But like Mexico, it offers only “third world [social] services.”
Spending on education may be particularly crucial, both as an investment in the country’s economic future and a viable alternative for youth to the illicit drug economy. Barry Ames, professor of Latin American politics at the University of Pittsburgh, told the HPR that Brazil must strengthen its limited social safety net. The bolsa familia or “family stipend” programs, Ames said, have been successful in keeping kids in school and reducing the malnutrition problem. Roberts suggested that Brazil use the Olympics as “a rallying point for the country” and invest in social welfare to “reduce socioeconomic pressures and give people opportunities to be productively employed.”
In addition, the government will need to wrest power away from the drug lords and reform the police and security forces from the top down. Experts generally agree that a multi-pronged approach must be used to address corruption and violence. Roberts argued that “having clear systems and procedures, transparency, not too many laws and the right incentives” would be steps in the right direction.
The rise of the press in Brazil is a critical part of increasing this transparency. “Brazilian tolerance of corruption has decreased because a lot of corruption scandals are being revealed by the press, which indicates people are not willing to overlook it,” Campante explained. Ames agreed, noting that “democratic competition has led to an improvement in bureaucratic competence” as people vote corrupt politicians out of office. Samuels suggested that change will be a long-term process and that “Brazil will live under global scrutiny for another five to 10 years,” which may solidify the trend toward greater freedom for the press and open democratic competition.
Ultimately, rather than marking Brazil’s ascent as a done deal, the Olympic Games may galvanize political will to reduce inequality and buttress the rule of law in the country’s poorest regions. Having addressed the problems of violent crime and corruption, Brazil may be able to resume its exuberant samba on the world stage with a more confident step in 2016.
Image Credit: Mike Vondran