Brazil's Lost Decade - Part II

               The last decade 2011-2020 was not easy to the Brazilian people. Governments after governments in Brasilia only gave us disappointment. We all Brazilians must fight for a better country because this country has everything to become a prosperous place: one of the largest area of cultivable land of the world, one of the largest potential of renewable energy of the world, one of the 5 biggest  world's productors of: iron ore, niobium, manganese, tantalum, tin, bauxite, one of the most peaceful relationships with others nations of the world (no need to spend money in arms), one of the largest tax revenue of the world (around 33% of GDP, the government has money to spend), the tenth-largest oil-producing country in the world. So, we all should agree that what Brazil need is more investment in education and in projects that can release its potential of development. We know it is not easy to overcome the middle income trap, but we can't accept low GDP growth and Brazil stuck decades in this social and economic situation. This post is a summary of four artcles. The first article was published in May 2017 at file:///C:/Users/User/Downloads/ANDRE-NASSIF-BRAZILIAN-KEYNESIAN-REVIEW-3-1-1st-SEMESTER-2017.pdf. The second was published at     https://www.bloombergquint.com/politics/brazil-risks-a-lost-decade-without-fiscal-reforms-oecd-says. The third was published at https://blogs.iadb.org/ideas-matter/en/another-lost-decade-for-latin-america-and-the-caribbean/. The fourth was published at   https://www.scielo.br/j/rep/a/bdcXKRCLxyR54pRRkQsXjNs/?lang=en

               The Brazilian economic recession was considered the deepest in Brazil's economic history. Between 2015 and 2016, Brazil accumulated a contraction of 7.5% in its real GDP, representing a dramatic accumulated fall in its per capita income of 9.2% in just these two years. It is not surprising that such an economic downturn has severely worsened social indicators in Brazil. The roots of the current Brazilian crisis are associated with both structural and shor-term causes. The main structural cause is related to the premature deindustrialization of the Brazilian economy, from 2005 to 2016, the share of the manufacturing sector in total GDP was reduced from 15.3% to 9.8%. Most brazilians economists agree with the importance of a long-term fiscal adjustment, believing it to be an important instrument not only for restoring confidence, but also for augmenting the room to maneuver so that Brazil's Central Bank can bring high real interest rates to lower levels compatible with international standards. The main pressure on the increase in public sector gross debt in Brazil after 2015 has been coming from the jump in interest rates payments. In an environment of recession, the best option to quickly reduce unemployment rates as well as reactivate private aggregate demand would have been an increase of public investment in infrastructure.                                                                                                                                                                                          With debt levels soaring following the government's pandemic-driven aid package, sustained growth hinges on fiscal adjustments and compliance with public expenditure rules, the OECD warned in an economic survey of Brazil.  Speaking from Paris, OECD Secretary General Angel Gurria, cautioned that the challenge ahead was "spending better, rather than spending more." President Jair Bolsonaro's economic stimulus program is widely credited for saving Brazil from a deeper recession and driving poverty down while the coronavirus raged. But pushed public debt to over 94% of GDP, has left markets on edge as the leader has tried to extend part of the aid. The OECD cited concerns with productivity, efficiency in spending, corruption and rising inequality. The report also called on Brazil to increase efforts to combat deforestation. "Many of Brazil's institutional and policy settings were made for a world that is very different from the challenges of today," the report said.                                                                                                                                   The Covid-19 pandemic has unleashed a health and economic crisis. Countries are providing exceptional support to families and firms. Debt ratios are rising. Getting fiscal policy right and maintaining financial stability will be key to ensuring a return to growth. Indeed, most countries are caught between the objectives of providing relief and maintaining economic recovery, and the need to adjust to halt the rise in debt due to exceptional spending and a fall in revenues. A V-shaped recovery would help, reversing revenue losses. The next years are going to be challenging as countries seek to boost growth and maintain fiscal sustainability. The risks are very real. The war against the virus is not yet won. Getting the fiscal policies right and maintain financial stability will be critical for a health recovery.                                                                                                                                                                               The Brazilian economy has shown low resilience to grow since the 2015-2016 recession. The cumulative decline in the biennium is far from being offset by the 1.1% growth rate observed in 2017 and in 2018. Besides, these disapponting results have a direct impact on the labor market. The year 2018 registered more than 12 million unemployed in the country with increasing precariousness in the creation of new jobs. In this paper, we will argue that in order to understand the difficulty of the recovery of the Brazilian economy one must take into account the process of premature deindustrialization observed in the 1990s and 2000s. The loss of importance of the manufacturing sector in the productive structure has important implications for the economy's aggregate productivity performance, because it limit the positive spillovers of productivity gains from the manufacturing industry throughout the economy. In the absence of these sustained gains, long-term growth is jeopardized. 

Brazil's Lost Decade

                      This post is a summary of the article with the incomplete title above published in August of 2021   https://www.jacobinmag.com/2021/08/brazil-lost-decade-economy-capitalism-neoliberalism-far-right-politics. The second was published in July 2020 at   https://atalayar.com/en/content/brazil-heading-lost-decade. The third was published in May 2019 at  https://www.bbc.com/news/business-48386415

                    In Brazil's worst decade in more than a century, unemployment, precarious and informal work, poverty, and inequality are all on the rise. A recent issue of the Economist magazine dedicated a long special feature to Brazil's economy and it termed its "dismal" performance over last decade. Among the root causes of the country's current predicament, the article argued, was the recent governments' inability to enact adequate neoliberal reform. The diagnosis from a magazine known as a champion of free-market liberalism, is by no means surprising, but does the analysis hold under scrutiny? While, indeed, the last decade in Brazil has seen tragic economic decline, this is by no means due to a lack of neoliberal orthodoxy. The last ten years should be seen as another "lost decade" for the country, the first having occurred in the 1980s. Over the course of the last decade alone, Brazil has experienced two recessions, one from 2014 to 2016, and another beginning in 2020. Between 2011 and 2020, Brazil's GDP grew by an average of just 0.27% a year. Data from 2020 shows that the country's GDP is 6.4% lower than it was in 2014 and its GDP per capita has decreased by 10.8 % in the same period. Brazil is significantly poorer than it was ten years ago. Brazil is de-industrializing at a rapid rate. At its peak in 1985, manufacturing accounted for 36% of GDP. After the blows of the past decade, industrial production is 12.4% lower than it was in 2011. As of 2020, only 11.3% of GDP is derived from the manufacturing sector. The proportion of high and medium-high tech in Brazil's industrial exports has also regressed from 43% in 2000 to only 32% in 2019, the lowest point since 1995. By contrast, exports in general have doubled since 2000, with China as the main buyer. For the most part, it is "agribusiness" that accounts for these exports. Technologically advanced, agribusiness has meant a massive spike in migration from rural to urban areas. Data shows that underemployment has leaped from 14.9% in 2014 to 28.7% in 2020. All this is occurring at a time when Brazil's wealthy are growing richer. Between 2010 and 2019, the annual profits of the four major banks combined more than doubled, jumping from 38.91 to 81.51 billion reais. In the context of such a debilitated economy, progressives in Brazil are in search of a solution. Developmentalists make the case for the "return of the state"; that is, a return of the state's capacity to intervene forcefully in the economy. But despite the good intentions, this argument is often based on diagnoses that understimate some of the deeper causes of the economic situation. Developmentalists of all stripes cab be prone to paying insufficient attention to the structural problems of Brazil's economy: its subordinate position in the international division of labor and production, its chronic shortage of public and private investments, its stagnant productivity and low-skilled labor force.                                                                                                                                                           Brazil, the giant with a bright future that never arrives, will close in 2020 the worst decade in more than a century, after spending seven years trapped in a maze of political and economic crises currently aggravated by the pandemic. The South America giant will have its second "lost decade" in the last 40 years, after that of 1981-1990, despite having huge hydrocarbon reserves and having one of the most thriving agricultural sectors on the planet. A t the beginning of the decade, Brazil, then governed by Lula, aspired to become a world power. Like other emerging countries, the country hardly felt the global crisis of 2008, its economy adavanced by 7.5% in 2010 thanks to the boom in raw materials. Between 2011 and 2013 growth was more moderate, with a real average rate of 3% per year, but in 2014, the economy began to show signs of weakness. The economic meltdown came in 2015 and 2016, when GDP collapsed by 7%, while in the following three years the recovery has been slow and gradual, with growth of about 1% per year. The world, meanwhile, grew between 2011 and 2020 an annual average of nearly 3% thanks to the emerging economies, led by China. Latin America will close 2020 with a average growth rate of 0.4% over the period. "The weak performance of Latin America is linked to the poor performance of Brazil, whose weight in the region's economy has been 34.5% in the decade", said the economist Marcel Balassiano from FGV.                                                                                                                                      In the previous decade, Brazil was lauded, along with India and China, as one of the emerging economies with fast rates of growth that would surpass developed economies by 2050. The economic performance of this decade, however, suggest Brazil does not belong in that league. A crippling two-year recession in 2015 and 2016 saw the country's economy contract by almost 7%. Economic recovery has been sluggish. In 2017 and 2018, the economy grew at a meage pace of 1.1% a year. And there is still more bad news: Brazilian workers are the ones paying the prices. The number of unemployed people has increased from 7.6 million in 2012 to 13.4 million this year. The official unemployment survey shows that 28.3 million people are underutilised, which means they are either not working or working less than they could. Wages are barely keeping up with inflation. Since the beginning of Brazil's recession in 2015, prices have gone up by 25%. So why is Brazil in such a mess in the first place? The main consensus among market analysts, is that the country started spending too much money around 2013. Since then, one of the main thermometers of Brazil's economy has been the fiscal deficit. During the boom years, Brazil had a debt which was 51% the size of its economy. The growing fiscal deficit raised the debt level to 77.1%. The government says that if nothing is done, the country's debt will be the size of its entire economy by 2023.

Democracy and Human Rights: A Pathway to Peace and Development

                                 This post is a summary of the book with the title above published at https://um.fi/documents/35732/48132/democracy_and_human_rights_a_pathway_to_peace_and_development.pdf/0b5b0d3a-a251-92a7-8113-14ca88603d01?t=1560450252015. And an article published at  https://www.weduglobal.org/wcontent/uploads/2016/02/SUU_KYI_CULTURE_OF_PEACE_AS08.pdf

                       The most important and best known document which concerns human rights is the Universal Declaration of Human Rights (UDHR) of 1948. The declaration has led to the conclusion of a host of international human rights agreements. Its core message is that human rights are inherent to all people and neither the state nor any other can take them away from an individual. The UDHR covers the principal human rights: the civil and political rights and so-called economic, cultural and social rights. Civil rights safeguard all persons their personal sphere of freedom, in which the public authorities may not interfere. Political rights ensure individuals the right of participation in voluntary political and social activities. The principle of the universality and integral nature of human rights was confirmed in the Human Rights World Conference in Vienna in 1993. A number of countries treat their citizens unequally. Freedom of speech, for example, may be restricted or some are prevented from participating in elections. It is typical of undemocratic systems to suppress the activities of NGOs, to restrict the freedom of the press and to conduct unfair elections. It may thus be very hard to exercise one's power of influence in society. Democracy lays a foundation for social stability and equilibrium. Stable and peaceful conditions, for their part, consitute a prerequisite for economic growth and development. Free elections and other democratic ways of action do not, however, as such, guarantee an improving economy. For the developing countries to manage to break out of the poverty trap, more equitable world trade and support from rich nations are required. Elections represent a vital part of the democratisation process of a country. Fair and genuinely elections give citizens the chance to influence the future of their country and area of residence. In the developing countries. outside elections observers are often used to ensure fair elections. The U.N. and its special development agencies represent a significant channel of development cooperation assistance. The promotion of human rights and democracy plays a major role in the operation of the U.N. system. According to the U.N. Development Programme, U.N.D.P., respect for human rights and promotion of good governance are essentially instrumental to development. Respect for individuals' human rights is traditional practice of the E.U., and democracy is an integral part of their decision-making procedures. All framework agreements related to development cooperation made by the E.U. include a statement which requires compliance with the principles of democracy, human rights and good governance. Cooperation can be suspended in case of a grave infringiment of the principles of the statement. The E.U. can also influence the developing countries' human rights policies through trade policy measures, since it is possible to take human rights issues into account when customs relief is granted to the developing countries by the E.U. Such benefits can be cancelled on account of continuing and flagrant human rights violations.                                                                                                                               The question of empowerment is central to both culture and development. It decides who has the means of imposing on a nation or society their view of what constitutes culture and development and who determines what practical measures can be taken. The more totalitarian a system the more power will be concentrated in the hands of the ruling elite and the more culture and development will be used to serve narrow interests. Culture thus is dynamic and broad. But when it is bent to serve narrow interests it become static and its exclusive aspects come to the fore and it assumes coercive overtones. The "national culture" can become a bizarre graft of selected historical incidents and distorted values intended to justify the actions of those in power. Many authoritarian governments wish to appear in the forefront of modern progress but are reluctant to institute genuine change. It is precisely because of the cultural diversity of the world that it is necessary for different nations and peoples to agree on those basic human values which will act as a unifying factor. In fact the values that democracy and human rights seek to promote can be found in many cultures. Human  beings the world over need freedom and security that they may be able to realize their full potential. Support for the desirability of strong government and dictatorship can also be found in all cultures. The desire to dominate and the tendency to adulate the powerful are also common human traits arising out of a desire for security. A nation may choose a system that leaves the protection of the freedom and security of the many dependent on the inclinations of the empowered few; or it may choose institutions and practices that will suffucuently empower individuals and organizations to protect their own freedom and security. The choice will decide how far a nation will progress along the road to human development. Governments must find news ways of enabling their people to participate more in government and allow them much greater influence on the decisions that affect their lives. Unless this is done, the tide of people rising aspirations will inevitably clash with inflexible systems, leading to anarchy. A rapid democratic transition and a strengthening of the institutions of civil society are the only appropriate responses. The basic requirement of a genuine democracy is that the people should be empowered to be able to participate in the governance of their country. Without this democratic institutions will be but empty shells incapable of reflecting the aspirations of the people and unable to withstand the encroachment of authoritarianism.