So
Rich Brazil, So Many Poor Brazilians!
by Daniel Torres
Thursday, 10 July 2008
A few days ago, I thoroughly enjoyed reading the book Lula
of Brazil: The Story So Far by Richard Bourne. It provided
an in-depth and mostly accurate account of Lula's tenure as
president of Brazil. One particular passage was particularly
striking. Bourne writes on page 170 that, "Talking to
ordinary Brazilians, one is constantly asked, "If the
country is so rich in resources, why are so many of us poor?'"
And, "Why doesn't this country get a move on?"
After reading these sentences I began contemplating these
intriguing questions. I also remember being asked by my Brazilian
family and friends a similar question that went like this:
"If Brazil is one of the largest economies in the world,
rich in almost every natural resource, why are the Brazilian
people still so poor?"
Obviously there is no simple answer to this dichotomy. The
social problems that plague Brazil, in fact, afflict most
of the third-world. South Africa, India, Colombia and Mexico
are a handful of countries that encounter similar social dilemmas.
More importantly, today's profound social inequalities are
what I believe to be a product of historical failures that
promoted exclusion and perverse inequality that is now beginning
to be rectified. Even considering today's modest advancements
in equality much more investment to reduce social disparities
is desperately needed.
A few months ago I saw an editorial piece by daily Folha de
S. Paulo columnist Eliane Cantanhêde where she began
to reflect on this age old question. Her online piece entitled,
"Que país é esse? (What country is this?)"
notes that according to the World Bank, Brazil's economy was
the 10th largest economy in the world producing a Gross Domestic
Product (GDP) of 1.585 trillion dollars nearly 2.88 percent
of the world's wealth, in 2005, and equal to half of the total
economy of South America. She goes on to contrast this with
the dire conditions many Brazilians endure despite living
in one of the largest economies in the world
If you divide Brazil's GDP by its 190 million inhabitants
you calculate a per capita figure of about 8,342 dollars.
This is an impressive figure for any third-world country although
misleading. The per capita number assumes that all of the
wealth is equally distributed. This is not true for Brazil
or for any other country.
The social conditions for the majority of the Brazilian people
remain grossly unjust. In July 2006, the Superior Electoral
Tribunal (TSE) released a detailed depiction of the national
electorate. Nothing less than 73.3 million Brazilian voters,
or 58.26%, of a total 127.4 million voters, did not complete
the 4th grade (ensino primário).
Of this group 8.2 million are illiterate (6.46% of all voters).
Another 21.3 million voters told the TSE that they had basic
reading and writing ability. The number of illiterates and
semi-illiterates are an astounding 23.95% of all voters, equal
to 29.5 million people, larger than the total number of voters
in São Paulo, Brazil's most populous state.
70% of the electorate that is illiterate and never having
completed primary school live in the Northeast region of Brazil.
In the Northeast alone, 4.2 million people are illiterate,
making it the region with more illiterates than the rest of
the country combined.
Only an estimated 7.1 million, or 5.65%, of all voters obtained
a higher education degree (ensino superior). The silver lining
is that number of voters who did not complete the ensino primário
in 2002 was 62.49% of voters, a higher percentage than the
current figure.
After coming to terms with these figures I wondered how this
hierarchy was built. I found a few of the answers to be in
the historical formation of Brazil as a country.
When Brazil abolished slavery in 1888 no land was redistributed
to former slaves. Brazil, like the rest of Latin America,
never completed a substantial land reform. Millions of Nordestinos,
residents from the Northeast, fled to the cities of São
Paulo and Rio de Janeiro in search of greater economic opportunity.
Without public housing or decent paying jobs, many poor Nordestinos
erected favelas (shantytowns) on public land. This migration
and settling continues today. Also important was the fact
that after the Brazilian Empire crumbled, in 1889, the all-powerful
economic elite remained in firm rule over the new republic.
The First Republic (1889-1930) was officially organized by
a rural oligarchy nicknamed "coffee and milk". The
presidency rotated between the coffee barons of São
Paulo and the farmers from Minas Gerais. Yet in 1894, due
to property and illiteracy requirements, a small clique of
wealthy Brazilians elected their first civilian president.
The first civilian president, Prudente de Morais, was elected
by 84% of the votes of the total 300,000 eligible voters.
The total number of eligible voters made up 2.2% of Brazil's
total population. These elite members of society continued
to exercise their exclusive right over the presidency and
country's future political, economic and social structure.
It was not until the 1930 election that the number of voters
surpassed one million voters. That year Julio Prestes won
57.7% of a total 1.9 million votes, yet the total number of
voters in that election amounted to just 5% of Brazil's population.
By 1960, the last democratic election before the military
coup of 1964, the voter base leaped to 12.6 million voters
yet this was still less than a fifth of the total population.
With the tacit approval of the middle-class and the rich,
the military seized control of the country suspending democratic
elections until democracy was restored in 1985. It was not
until the Constitution of 1988 that voter enfranchisement
extended to all Brazilians effectively giving illiterates
the right to vote.
The lack of democratization by excluding the masses from the
vestiges of power had a devastating consequence on average
Brazilians. The government was not a representative body to
the interest of the majority of Brazilians. The state catered
to elite interest of the country.
The disparity of public education exemplifies the lack of
commitment to the interests of the majority of the population.
In 1960, South Korea and Brazil had 80% and 90% of its labor
force, respectively, with less than 8 years of education.
Both countries invested the same percentage of the GDP in
education while both countries, at that time, were relatively
poor.
Brazil's economy was beginning to show signs of economic distress
while South Korea was in the midst of recovering from the
Korean War. The one big policy difference between both countries
is that throughout the decades, Korea invested 80% of their
education budget went to elementary and high school. Today,
the result is evident: only 20% of Korean workers have less
than 8 years of education.
On the other hand, Brazil, over these past decades, divided
education expenditures by 50% between basic (elementary and
high-school) and higher education. A sizable education budget
developed world-class universities, which Brazilians should
be proud of. The hope must have been that an elite segment
of the population would spur the needed economic development
for the rest of population. But after 3 decades the result
of this strategy is visible: 80% of the labor force has less
than 8 years of education.
Besides the allocation of funds, the actual amount of funding
in education was also pitiful. From 1970 to 1973, Brazil's
entire education budget equaled less than half the cost of
Tucuruí, a 6-billion dollar power dam in the Amazon.
During that time, 30% of the population could not read or
write, fewer than half of all children finished high school
and 4% of the total population went to college. As one author
puts it, "It was as if the entire country was being prepared
to compete in the 19th century" (9). The political class
rules over the Brazilian people while governing for the entrenched
elite.
Thus it is not surprising that the level of inequality in
Brazil remains perverse. According to the Institute for Applied
Economic Research (IPEA) 10% of the population, equivalent
to roughly 19 million people, garner a fortune equal to 75%
of the country's total income. The salary of the rich is 23
times larger than those who are poor. The current level of
inequality is about the same as it was during the military
era (1964-85) but remains slightly higher than prior to 1964
(10). Land inequality is also dominated by a handful of large-scale
farmers exacerbating the rural conflicts.
Black and White
There is also a racial component to this injustice. Too many
Brazilians believe that because of the country's historical
mixture of races that it has overcome racism, discrimination
or prejudice. Much of the data emanating from the country
tends to contradict these notions. One study from 1999 to
2005 demonstrates that most white Brazilians die of diseases
while blacks tend to die from homicide.
Other studies show that blacks and pardos (brown) make up
the majority of unemployed in the country even though together
they represent 42.8% of the working-age (12). According to
the Brazilian Institute of Geography and Statistics (IBGE)
blacks and pardos earn half the salary of what whites make.
This gap in salary is in large part due to the sizable disparity
in educational opportunities (13). Blacks and pardos also
have lower life-expectancy, higher infant mortality and illiteracy
rates than whites in every region. The fact that there are
poor whites does not disregard that fact blacks and pardos
must overcome greater obstacles.
The poorest region is the Northeast region, where the majority
of African descendents worked as slaves on the sugar field.
It has the highest illiteracy rate in Brazil. Half of those
who are poor in the country reside in the Northeast region.
Unfortunately too many Brazilians want to avoid all of these
racial disparities that exist by arguing that Brazil never
legally excluded blacks like America or the Europeans.
I feel that racism only manifests itself differently in Brazil
due to its unique history. Predominantly white college-educated
Brazilians also argue that the American and European concept
of race is dividing Brazil between these artificial racial
lines that did not exist in Brazil because of the historic
race-mixing.
My lens is that Brazil has always been a divided society and
that racism, prejudice and discrimination does not end because
of misogyny. I strongly believe that the elites conjured the
myth of 'racial democracy' to sustain their hegemony over
power and the state. The tiny elite in Brazil could not have
physically excluded blacks and their descendants, like Americans
or Europeans did, because the white Europeans were vastly
outnumbered, until the 20th century, thus risking their economic
and political grip over the country.
Throughout Brazil's entire colonial period it imported 3 to
4 million of a total 10 million slaves worldwide. In comparison,
the United States of America imported a total of 500,000 to
750,000 slaves.
The Brazilian political elites, in the early 20th century,
saw blacks as a handicap to development. It believed that
whiter population would make the country developed so the
elites promoted a 'whitening' of the population through European
immigration and race mixing to destroy the "genetically
inferior" black race. American and European laws against
race-mixing were obviously based on their racist mentality
but ending this horrific practice alone did and does not eliminate
deep-seated structural racism.
The all-important tangible political, social and economic
benefits elude too many Afro-Brazilians in Brazil and in fact
for all black descendants throughout Latin America.
Yet since 2002, Brazil is slowly trending towards greater
income equality. Lula's social and economic strategy is beginning
to bring down income inequality. From 2001 and 2005, the income
of the poorest 10% increased by 36% while the richest 10%
saw a 1.2% decrease.
According to pollster DataFolha, 28% of Brazilians say that
their family earns "too little", down from 45% before
Lula assumed power in 2002. Almost 12 million electorates
have left the lowest income categories, D/E, for class C making
it the largest class with 46% of the population.
Between 2006 and 2007, the richest A/B class fell from 18%
to 15%, the social class C grew from 36% to 46% and the lowest
D/E class collapsed from 46 to 39% (15). Since 2002 the Gini
Index - the Gini coefficient measures income inequality in
a society - shows inequality fell from .540 to .502 and IPEA
(Institute of Applied Economic Research) expects it to further
drop to .490 by 2010 (16).
There are various reasons to explain the reduction in income
equality. The supplemental income from Bolsa Família
(Family Voucher) boosts the income of the poorest families.
Almost all children attend elementary school, which will improve
the average education of the population in the future further
reducing income inequality. But more money needs to be invested
in basic education especially in high school (ensino médio)
of which only a third of Brazilians attend.
Also the steady adjustments in the minimum salary from about
240 reais in 2002 to 415 reais (US$ 258) today coupled with
stable prices improved the purchasing power for millions of
working-class Brazilians. Unfortunately, inequality remains
entrenched.
The regressive tax system punishes the poor. According to
IPEA director Márcio Pochmann, the poorest 10% pay
32.8% of their income in taxes while the richest 10% only
pay 22.7%. A much more progressive tax code is urgently needed
to find the necessary funding for the social problems that
currently reside.
American journalists Bill Moyer on equality during a recent
media reform conference:
"Extremes of wealth and poverty cannot be reconciled
with a truly just society. Capitalism breeds great inequality
that is destructive unless tempered by an intuition for equality
which is the heart of democracy. When the state becomes the
guardian of power and privilege to the neglect of justice
for the people who have neither power or privilege you can
no longer claim to have a representative government."
Extreme inequality allows a powerful interest to exert a tight
control over government. Growing inequality in most of the
world forces governments to be mere representatives of a plutocracy
not of the people who democratically elected them. Government
is one important entity that can spur the redistribution of
this wealth in a more equitable manner. All segments of society
from social movements, private sector to civil society must
play a role in improving the current situation. By reducing
inequality, Brazil can strengthen its nascent democracy.
Clearly, the reasons outlined are only a few reasons for the
historic inequality.
Having a large economy, abundant natural resources, does not
necessitate that the average person benefits the enormous
wealth being produced. Investment in basic education, and
health care, for all is urgently needed but it only begins
there. Investment in other vital basic social services (sanitation,
housing etc.) must be an integral component to any commitment
to social and economic justice.
By 2050, it is expected that Brazil will have the 4th largest
economy in the world. Investing billions in upgrading the
economy will not build a more accessible and equitable society.
The real question to contemplate is: will the projected economic
growth bring about prosperity to all Brazilians or continue
to exclude the vast majority while rewarding the few?
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