Prophets and messiahs

Deep inequality, a mismanaged pandemic, widespread violence and a tanking economy. How did Brazil get into this mire?

Standpoint Magazine

A recent incident concerning pandemic-related compliance measures in Rio de Janeiro made the headlines in Brazil. A pair of customers who refused to wear masks, which are mandatory in the city, got angry at the inspectors and objected to being addressed as “citizens”. One of the two was, his partner stressed, “a civil engineer, with a degree, better than you”. The pair were not fined, but the inspectors suffered abuse from many present.

The altercation is a microcosm of Brazil’s travails. A massively mishandled pandemic, laws that apply differently to different people, and, of course, a jarring naturalisation of social hierarchies. As the couple blithely remarked, being a “citizen” is below the lofty status of holding a traditional professional degree. And, below the “citizens”, there are the masses denied basic rights, especially in a city that has seen its economy and public services collapse over the past seven years or so.

Deep inequalities are being revealed and heightened by the pandemic, whilst Brazil’s economy has been falling behind global competition for decades. How did things get to this point? A key factor is that the country has lacked a comprehensive vision of what it wants to become and how to get there.

By a vision I do not mean the personal dreams and vanity projects of strongmen. Brazil has had more than its fair share of prophets and messiahs, of which President Jair Messias Bolsonaro is the latest and most dangerous. A vision for the country has to be built from the bottom up, eschewing enlightened leaders in favour of a participatory definition of people’s shared future.

Before uncovering some of the tracks that led to the current morass, let us assess just how mired things are.

In 2017, nearly 64,000 people died in Brazil due to interpersonal violence (which excludes wars and terrorism). This was the highest number for any country in the world, representing about 16 per cent of global deaths due to interpersonal violence that year. With just under 3 per cent of the world’s population, this is a striking over-representation.

If violence is widespread, it is by no means random: it has a colour, a face and an age. About 29,000 men and boys between 15 and 29 years were killed in Brazil—nearly 22 per cent of the global total. This meant a mortality rate in some Brazilian states of nearly 300 per 100,000 for this group.

In Alagoas, a state in North-east Brazil, 1,042 black and brown young men were the victims of homicide in 2017—compared to 18 white men. There is an even more sinister dimension to this, as research by the Public Security Forum estimates that 6,220 people were killed by police intervention across Brazil in 2018; 99 per cent of them were men, 75 per cent black or brown, and 78 per cent between 15 and 29 years of age. The police are literally killing thousands of young black and brown men and boys in Brazil every year.

It is not only violence statistics that shame Brazil. With about 110,000 official Covid-19 deaths by mid-August, it is beyond evident that the country is mismanaging the pandemic to an extraordinary degree. As a rough guide, this represented just over 10 per cent of global Covid-19 deaths.

The poorest individuals were twice as likely as the richest to contract the virus, whilst brown people had nearly three times the chances of white ones. Less able to socially isolate, be it because of precarious housing, lack of water and sanitation, or employment and financial conditions, already-marginalised groups are the prime victims of the disease.

Overall, Covid-19 has an estimated case-fatality rate of about 1 per cent in Brazil, expected to be much lower for young people. Compared to 0.3 per cent of young men dying violently in some states of the country every year, perhaps it is fair to say that, for them, everyday life is more dangerous than Covid-19.

Is there reason for economic hope? There is little doubt that the pandemic hit an economy that has been lagging behind for decades, aggravated by the effects of a yet-unfinished crisis that began in 2014.

To put things into perspective, in 1965 Brazil’s GDP per capita (in US dollars) was about two and a half times that of South Korea. In 1980, they were roughly comparable, and since then South Korea has forged ahead: its GDP per capita was about three times that of Brazil in the early 1990s, growing closer to four times in recent years. The comparison to China is even less flattering: as recently as 1991, Brazil’s GDP per capita was over ten times that of China, now being some 15 per cent below. The US’s GDP per capita is currently about seven to eight times that of Brazil. Which is roughly the same ratio observed in 1974.

Rome wasn’t burned in a day. A longer retrospection would certainly involve the open wound of slavery, Portuguese colonisation and more. But, for the sake of brevity, let us look at this millennium.

In January 2003, Luís Inácio Lula da Silva of the Workers’ Party rose to the presidency amidst roaring popular clamour. He was elected on a ticket to reduce poverty whilst sticking to the inherited economic policies. Buoyed by rising commodity prices, the government kept the budget balanced for the first years and implemented two policies that would mark the following decade: increasing minimum wages, which
almost doubled over the Workers’ Party governments, and introducing the conditional cash transfer Family Allowance.

In a historical novelty for the country, 2003 to 2013 was the only significant recorded period in which the economy grew whilst income inequality decreased. Real GDP per capita was a third higher in 2013 than in 2002, whilst 22 million people left poverty behind until 2014, and the Gini index of inequality fell from 0.58 to 0.52. If growth rates were nothing compared to China, which grew 177 per cent over the same period, or even neighbouring Argentina, which grew 57 per cent, the combination of growth and poverty reduction seemed to mark a new age for the country.

The notion that animated economic and social policy-making during this period was the idea that a rising tide would lift all the boats. Lula never quite said he was “intensely relaxed about people getting filthy rich”, but he did repeatedly trumpet the fact that his government had presided over the period when banks had profited the most. Given some means-tested income support and with rising minimum wages, it would seem that discussing social hierarchies, the tax structure or the character of the country’s political system were unnecessary digressions.

Appealing though the notion of a win-win scenario might be, in a sense it is quite the opposite of a vision for change. It is the idea that by keeping things the same, they will eventually become different. Bankers would profit, workers would get pay rises, the poor would get cash transfers and politicians would continue to do deals behind closed doors. There was no need for a vision: Brazil could forge ahead as its entrenched inequalities withered away naturally.

Leaving government with almost 90 per cent approval rates, Lula made his successor Dilma Rousseff, who took office in 2011. Dilma, as the former president is commonly known, picked up the baton and added a developmental twist to the government’s economic policy, whilst keeping social policies along similar lines.

The main thrust was the “New Economic Matrix” of 2011. After an initial budget cut, the government relaxed fiscal discipline, devalued the exchange rate modestly, reduced interest rates, and proposed new industrial policies. Beginning with a few industries but quickly extending to most sectors of the economy, the government offered subsidies, tax exemptions, cheap credit, and other cost-reduction measures. It fell short of more transformative initiatives, such as a concerted drive to stimulate innovation in cutting-edge sectors, and, importantly, it had no sticks to balance the carrots.

Perhaps the notion that summarised this approach was to reduce costs across the board for business, plug in extra support for big domestic companies in mature industries, and expect innovation to follow, with jobs and economic growth in tow.
Everyone would continue to win: the government would distribute incentives for all sectors, eschew conditionalities for supporting them, and pick winners but not losers. This was a vision for costless change that foresaw transformation through continuity.

The economy did grow until 2013 and poverty and inequality decreased until 2014, but there were signs that the engines were losing steam. With competition in international manufacturing tightening since the 2008 global financial crisis and with international commodity prices falling from 2013, Brazil’s economy lacked the necessary competitiveness to thrive. In 2014 around 70 per cent of Brazil’s exports were primary products or natural-resource-based goods, about the same percentage as in the early 1980s. An international trade pattern focused on producing soybeans to serve as fodder for pigs in China, which is fast outcompeting Brazil’s industry, is hardly evidence of keen technological upgrading.

The political situation took a drastic turn in June 2013 when millions took to the streets with two principal demands: firstly, high-quality public healthcare and education; secondly, a crackdown on corruption. The government reacted with contempt, dismissing the protests it could not understand. The economy was still growing, incomes were indeed rising and, historically, the Workers’ Party had been the one to organise street protests, not the one to be pressured by them.

Then the economy tanked. GDP per capita fell by almost 10 per cent, the unemployment rate nearly doubled, and there were four million more people in poverty in 2016 than in 2014. The government was bewildered, and what little leadership it had evaporated as Brazil, once again, entered into crisis-management mode.

Meanwhile, the largest corruption investigation in the country’s history was unfolding. Operation Car Wash uncovered billions in bribes which lubricated the political system. Parties left, right and centre were implicated, with few exceptions.

President Dilma was ousted from office in 2016 as social conditions deteriorated further and bitter political divisions deepened. The terrain was becoming propitious for someone who could paint themself as an outsider, allegedly to reject the corrupt and immoral politics of the establishment.

Fast-forward a couple of years. President Jair Bolsonaro assumed office in January 2019. He has been consistently misogynistic, racist, homophobic, pro-torture and pro-dictatorship. Surely such extreme views mean he had a vision for the country, however beyond the pale? Well, perhaps not.

Bolsonaro is not the shrewd politician who will stop at nothing to reach a set goal, a ruthless agent of change serving a cause. At its worst, this category gives us cold, calculating leaders who trample over the masses to implement their vision. With some stretch, perhaps, Hungary’s Viktor Orbán or Turkey’s Recep Tayyip Erdoğan are in this group.

But neither is Bolsonaro an idealist politician, whose actions are guided, and more importantly constrained, by inflexible moral codes. He belongs to an altogether different class of politician, that of the gangster or thug. I do not mean this in a moral sense, even if the implications are somewhat unavoidable, but in a political one. If a political thug is successful, he (they do tend to be men) will reap private benefits, with whatever costs to others. If this requires paying lip service to the ideology of the day, so be it, as long as it gets the self-gratifying job done. The key issue is that, in contrast to ruthless agents of change, a political gangster’s principles and goals are simply instruments in a self-serving project.

In Brazil, this is perhaps best represented by José Sarney, a politician who has been on as many sides as there have been powerful men in Brazilian politics. From the 1950s to the 2010s, having occupied the highest executive and legislative posts in the country, he has never made the mistakes of committing himself to a principle, of being far from power or of letting charges against him lead to a conviction. Over 90 years old now, he is the successful political gangster par excellence, with a political acumen that outstrips anything Bolsonaro and his entourage could ever muster.

If there is no doubt Bolsonaro is an authoritarian bigot, for better or for worse this falls short of being committed to a cause. His political tactics are likely to keep him attached to oppressive world-views and inflammatory statements, but these are all means to an end—namely, securing benefits for himself and his sons. There is very little doubt he would jettison one or all of these positions if this was believed to bring him and his sons any benefits.

Bolsonaro might not sacrifice his clan at the altar of an interminable list of oppressions, even if there is every reason to believe he is committed to them—but when it comes to an economic plan, the marriage is all the more clearly one of convenience. He was elected on a radically free-market ticket, putting Paulo Guedes, a Chicago School economist, at the helm of the economy. Perhaps Bolsonaro had changed his ways, after decades of pro-statist voting patterns in Congress. But as his actions show, his alleged conversion to liberal economic views is simply what he thought would carry the day.

His flagship economic policy to-date, the reform of public pensions, was watered down substantially and came to resemble very closely that proposed by his predecessor, Michel Temer. In fact, the key agent in passing the law was congressman Rodrigo Maia, who is mostly an opposition figure. Bolsonaro even said that, if it were up to him, he would not change the pension law.

In the meanwhile, foreign investors have fled the country in droves, as the economy continues in the doldrums and social conditions deteriorate sharply. Tens of billions of dollars have left the country’s bonds and equities since Bolsonaro came to office, the currency has depreciated by over 30 per cent against the dollar, environmental destruction has picked up sufficiently even to jeopardise international trade relations and GDP per capita continues to be much below its 2013 peak. More worryingly still, unemployment and precarious labour conditions have been enduringly high, even before the pandemic began, with poverty and inequality on the rise.

Since Jair Bolsonaro (above) came to power, foreign investors have fled, the currency has depreciated by over 30 per cent against the dollar, and unemployment has been enduringly high (© Bruna Prado/Getty Images)

Whether Bolsonaro will be a successful political gangster remains to be seen. His popularity, although low, has maintained a floor of about 30 per cent in the polls, the mishandling of the pandemic notwithstanding. He has not been formally charged with any crime, but there are multiple investigations circling ever closer to him and his family. With a constantly shuffled cabinet, increasingly staffed with military personnel, his political alliances have faltered but not broken down.

If his success is hard to predict, it is clear that Brazil is rudderless. That amidst the greatest health crisis of the century, the country has been without a health minister for months is the perfect example. There are only two questions for the population: when will the storm end, and what will be left after it.

Brazil regained democracy in the 1980s, ended near-hyperinflation in the 1990s, and implemented a minimal social security network in the 2000s. The 2010s are ending in what is shaping up to be even more of a lost decade than the 1980s, with stagnation, if not a downwards spiral, in economic, social and political terms. The 2020s, opening under the sign of the massively mishandled pandemic, are being ushered in through unnecessary but all too real suffering. As such, besides the incontrovertible pain, they also represent another possible turning point for the country.

Brazil needs a vision of what it wants to be in the future, alongside the social, economic and political arrangements necessary to implement it. For too long it has lacked a clear direction.

If there is any hope, it is to be found in the several social movements and bottom-up initiatives that have been contesting the country’s diverse and interlocking inequalities. The black movement, feminist collectives, housing organisations, and many other initiatives have stood up to naturalised social hierarchies, offered images of what the future should hold in store, and demanded social rights, with some notable successes. They have also faced a strong backlash, especially in the last few years.

Implementing a vision will require more than diverse grassroots initiatives, though, however strong they might individually be. Putting people first, redrawing the social pact, and envisioning an economy for the 21st century will require a strong articulation between different groups, interests and regions of the country, feeding all the way up to a national project. Bottom-up, participatory initiatives must drive this process, but it can only hope to succeed once it extends beyond them.

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