Brazil: The Big Picture
by Jose Ricardo Aguilar
University of Bridgeport
10 Jan 2011
Revised on March 10, 2011
The Big Picture
The world economy has changed faster than what we would have expected 10 years ago. People stopped believing that a country such as the United States or the European Union alone had the power to lead the world economy. After the economic crisis of 2008, we like to think we grew wiser, and for that reason, higher skepticism became a recommended attribute. All of sudden, things are not how they used to be. Those working on Wall Street are not so “cool” anymore and asking the government to increase regulation in certain industries is a reasonable request.
Signifying even more this world change, there is China which cannot seem to stop growing its economy. Right bellow, there is also India growing its workforce in an incredible pace. In another 10 years, the country is expected to have more than 130 million. While this is all happening, we have seen Iceland stumble and the almighty Euro prove it is not so powerful anymore. In a more general sense, but still helping reshape the world, there is Global Warming always hitting on the same note followed by globalization, which cannot stop flattening the surface of the Earth. Looking back at the big picture, we should be aware that things are changing quickly. This statement is not meant to announce the coming of The Post-American World, but we should be aware that other economies are growing faster than the powerful ones. This does not mean that the “big boys” gave up on growth. They are still moving on, but the emerging ones are simply moving on in a faster pace.
In the midst of all this change, Brazil has stepped up to the plate. The country is now one of the top ten biggest economies of the world and is (somewhat quietly) demanding the status of “Developed” instead of “Developing Nation,” as found in the textbooks. While growing its economy at a steady pace, the country is also becoming an active player on the world stage. Here is a young democracy daring to say it does not need permission to try to solve international disputes. When the country is not voting against sanctions in the UN, it is lending money to the IMF or calling for the world’s attention by hosting the upcoming World Cup and Olympic Games.
John Micklethwait, Editor-in-Chief of The Economist, raised an intriguing question during the Brazil Summit 2010 in São Paulo. Mr. Micklethwait opened the summit by asking if Brazil is the one “looking out to the world or if the world is the one looking into Brazil.” Others would argue that it seems as if Brazil inflates its chest to impress the world while the rest of the world is not yet so amazed. 15 to 20 years ago, Brazilians were the ones trying to protect their patrimony from foreign influence. Now, the country has opened its doors and wants others to acknowledge its presence and accomplishments. The Brazilian economy is growing, but the challenge here is the sustainability of this growth. From 1990 to 2010, Brazil’s average quarterly GDP growth was 0.79 percent, whereas the last decade was marked by above average growth rates. The industries responsible for this growth are mostly agriculture, mining, manufacturing, and the service sectors. The Brazilian people are near the point where they will start wondering when they go from “emerging” to “emerged,” but before the country can get there, there is a lot of work to do. This is why sustainability is such a big concern. Only by figuring out how to maintain growth can the country then figure out how to reach the next step and join the super-powers.
The possibility of sustaining growth came to reality towards the end of Itamar Franco’s presidency and after the success of the Plano Real, led by Fernando Henrique Cardoso (FHC) in 1994. The word “stability” then became something achievable and worth fighting for. The success of FHC’s Plano Real initiated the cycle of development and stability that Brazil lives in at this very moment. Today, both “stability and continuity” are reasons behind the election of the first woman president in a country known for its machismo . Dilma Rousseff now leads the country based on the promise to maintain growth and continue to expand the middle class. Even though Ms. Rousseff is picking up from a comfortable place, there is still significant work to be done if she wants to keep her promises.