Reading the headlines in the British media recently, you could be forgiven for thinking that Brazil has rapidly become a basket case.
According to some commentators the economy is bust, protests are out of control and the World Cup is doomed to failure – so can Brazil’s example really help other developing countries?
There are certainly big problems that need to be explored, but let’s not forget that since the mid-90s, Brazil has seen fairly consistent economic growth while also achieving a big reduction in poverty.
And while the good folk of Davos have been wringing their hands about the perils of inequality, Brazil has been doing something about it. Over the last 10 years all Brazilians have seen their incomes rise, but the poorest have benefitted significantly more than the richest.
The policies Brazil has adopted could be of real interest to many African countries. Countries like Zambia, which has seen positive growth rates that simply haven’t translated into poverty reduction – or Nigeria, which has seen inequality spiral over the last 20 years.
Brazil’s development model?
The IRIBA research agenda will analyse how Brazil has achieved this in much more detail – and will try to determine if this constitutes a development ‘model’. However, it’s clear even at this stage that there are a few vital elements:
- Agriculture and commodity prices:
The global rise in commodity prices certainly played a major role, but it’s not the only reason behind Brazil’s rise. Indeed the long-term growth in agricultural productivity has been driven by government policy, and in particular an investment in research through its EMBRAPA programme.
- Direct support for the poor:
Government investment in health, education and direct poverty reduction has played a major role – with the much feted Bolsa Família grabbing many of the headlines. The scheme has proved to be hugely effective, providing financial support to over 50 million Brazilians, and has been responsible for 28% of the poverty reduction from 2002-2012. But it’s also remarkably cost-effective, amounting to just 0.5% of GDP.
- Political consensus:
While the particular policies have been important, the politics of Brazil’s development have also enabled the transformation to happen. Economically, there’s been a broad consensus across political parties emphasising incremental and inclusive reform, which has led to relatively stable macroeconomic and fiscal policies.
Brazil has long historical ties to Africa, not least through the enduring legacy of the slave trade.
These ties were reinvigorated by President Lula, who made multiple visits to the continent, leaving a trail of new embassies in his wake in the name a fostering greater South-South cooperation.
Given the existing interest and engagement between Brazil and many African countries, we hope that IRIBA will be able to provide a definitive account of Brazil’s development experience and translate this into specific suggestions that could be of use to particular countries in Africa.
While the initial IRIBA research papers are being finalised over the next couple of months, I’ll go into more detail on some of the issues and questions raised here. If there’s anything that you’re particularly interested in hearing more about, please let me know…