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Special report: Brazil
Grounded
Having come tantalisingly close to taking off, Brazil has stalled. Helen Joyce explains what it must do to get airborne again
Sep 28th 2013 |From the print edition
IN JUNE THIS year Brazil was struck by an outbreak of mass protests as sudden as a tropical storm. Brutal policing of demonstrations against a rise in bus fares elicited a wave of solidarity and brought more than a million marchers to the streets on subsequent nights. It also gave vent to previously unsuspected public fury over rising inflation, high taxes, poor public services and political corruption. Even football, a Brazilian passion, became a target of the protesters’ ire. Many carried placards contrasting their government’s lavish spending on stadiums for next year’s World Cup with the dire state of the rest of the country’s infrastructure.
The change in political weather came after almost two decades of brightening skies. Since 1994, when hyperinflation was tamed with a new currency, the real, successive governments have pursued generally sound economic policies and adopted anti-poverty programmes. The economy grew rapidly and inequality declined. The global commodity boom helped by sucking in Brazilian iron ore and agricultural produce, and in 2007 Brazil struck vast deposits of deep-sea oil. Being chosen to host both the 2014 World Cup and the 2016 Olympics seemed due recognition that its days as a chronic underachiever were behind it.
But Brazil’s economy did not play ball. Having grown by 7.5% in 2010, the fastest rate for a quarter-century, it slowed to 2.7% in 2011 and a mere 0.9% in 2012. This year will see a tepid recovery at best. Inflation is sticking at around 6%. Pessimists recall that the one period of impressive growth within living memory, in the 1970s, ended in chaos and hyperinflation. In recent years Brazil has been seen as one of the leading emerging-market economies that would help drive global growth in the next half-century. But many
Grounded
Having come tantalisingly close to taking off, Brazil has stalled. Helen Joyce explains what it must do to get airborne again
Sep 28th 2013 |From the print edition
IN JUNE THIS year Brazil was struck by an outbreak of mass protests as sudden as a tropical storm. Brutal policing of demonstrations against a rise in bus fares elicited a wave of solidarity and brought more than a million marchers to the streets on subsequent nights. It also gave vent to previously unsuspected public fury over rising inflation, high taxes, poor public services and political corruption. Even football, a Brazilian passion, became a target of the protesters’ ire. Many carried placards contrasting their government’s lavish spending on stadiums for next year’s World Cup with the dire state of the rest of the country’s infrastructure.
The change in political weather came after almost two decades of brightening skies. Since 1994, when hyperinflation was tamed with a new currency, the real, successive governments have pursued generally sound economic policies and adopted anti-poverty programmes. The economy grew rapidly and inequality declined. The global commodity boom helped by sucking in Brazilian iron ore and agricultural produce, and in 2007 Brazil struck vast deposits of deep-sea oil. Being chosen to host both the 2014 World Cup and the 2016 Olympics seemed due recognition that its days as a chronic underachiever were behind it.
But Brazil’s economy did not play ball. Having grown by 7.5% in 2010, the fastest rate for a quarter-century, it slowed to 2.7% in 2011 and a mere 0.9% in 2012. This year will see a tepid recovery at best. Inflation is sticking at around 6%. Pessimists recall that the one period of impressive growth within living memory, in the 1970s, ended in chaos and hyperinflation. In recent years Brazil has been seen as one of the leading emerging-market economies that would help drive global growth in the next half-century. But many