IS408 Group Discussion on Brazil Economic Growth

IS408 Group Discussion §

1. Why was it said that Brazil’s economic growth did not achieve meaningful development? §

• The country is politically divided: between center-left and center-right (in 2004)
  • Deal strike to deal with poverty and monetary policy
• There is growth but no development
  • Economic is growing, but inconsistently
    • It relies on exporting to China, and the abnormally high commodity prices in recent years
      • Growth remains vulnerable to world commodity prices
      • When commodity prices increased, Brazil’s (% of Manufactured share of total export) dropped → Showing its vulnerable to price changes (57% in 1980 → 34% in 2011)
    • Brazil has a prolonged status as a highly indebted country
    • Continued problems of infrastructure
    • a lack of savings to finance its productive opportunities at reasonable interest rates.
      • In raising domestic savings, Hausmann has emphasized the importance of “creating a financially viable state that does not over-borrow, over-tax or under-invest.”
  • Other indicators lagged
    • There’s economic and social progress
      • But there’s inequality and social division
        • The top 10% earns 42.9% the income
        • Trying to solve with minimum wage
      • social progress remains tenuous as revealed by the widespread protest demonstrations that erupted in 2013.
      • Brazil’s HDI ranks 85th, below many lower income countries
        • Life expectancy at birth, child mortality, malnutrition
      • Child Labor: 7 million children working
      • Poverty: In the 11st century, the most extreme poor lived with 2 to 1 dollars a day.
      • Land owned by rich, but unused
      • Social Inclusiveness
        • Brazil 2nd most populous black population in the world
        • Blacks and mulatto are the most impoverished while white are rich
        • It’s a crime, but no one is sent to jail for it
        • the average black worker receives only 41% of the salary of the average white worker
• Why no meaningful growth?
  • Actual development requires a healthy, skilled, and secure workforce or people. When the government ignores health, education, and community development, progress in development is grinded to a halt or even regress.
  • Growth isn’t just the economic indicators, its the social, inequality, welfare of the people as well
    • Brazil experience economic growth in GDP, but its social development and welfare lacks in mnay ways

A country’s development does not only depend on its economic indicators such as the Gross Domestic Product, Total Income, or Growth per year. Brazil, in this case, neglected social development, one of the three indicators among economic and politics to progress development of a country. Therefore it is often said that although statistics are up, Brazil is not making any meaningful development. Real development in a country requires a workforce and people who are healthy, skilled, and secure. When health, education, and community development is neglected by the government, progress in development of the country is grinded to a half or even regress. According to Amartya Sen, true development can only be achieved if the people’s “Capabilities to Function” in society are satisfied. However, Brazil’s Human Development Index ranks 85th, below many lower income countries. The top 10% earns 42.9% the total income, while the extremely impoverished lives on $2oreven$1 a day. 7 million children illegally works in Brazil today. Unused lands are owned by the rich and kept from use by the poor. Finally, racial inequality is prevalent among black and white population.

2. What is the current situation of Brazil’s social inclusiveness policy? Is it successful? Why or why not? §

• Social Inclusiveness
  • Brazil 2nd most populous black population in the world
  • Blacks and mulatto are the most impoverished while white are rich
  • It’s a crime, but no one is sent to jail for it
  • the average black worker receives only 41% of the salary of the average white worker
  • Blacks live in shanty towns or slums
  • Black representation in government is shockingly rare, even in the states where nonwhites make up a majority of the population.
  • University places are overwhelmingly claimed by whites
• Some progress has been made, but Brazil may need a stronger movement comparable to the U.S. civil rights struggle of the 1960s.
  • But in the absence of overt Jim Crow laws, it is sometimes hard to identify the appropriate target.
    • Don’t know who to blame
  • Some form of meaningful affirmative action may be the only way to begin to overcome the problem.