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Last Updated: Thursday, 24 November 2005, 22:38 GMT
Brazil resents image of economic failure
By Robert Plummer
BBC News business reporter in Sao Paulo

It never takes much for Brazil's business class to feel insecure about their place in the world.

View of Sao Paulo city centre
Sao Paulo is the economic and business centre of Brazil

While most of the 183 million people in Brazil are at ease with their country's image as the land of football and samba, its economic movers and shakers are struggling to project a different reality.

It bothers them that foreigners are largely unaware of Brazilian achievements in such fields as agribusiness and aviation technology.

And their ears are still ringing from the jibe - attributed to the late General de Gaulle of France - that Brazil is "not a serious country".

But the soul-searching is particularly intense at the moment, with less than twelve months to go before the next presidential election in October 2006.

As the countdown to polling gets under way, the main opposition parties are already using large chunks of TV airtime to attack President Luiz Inacio Lula da Silva's record as Brazil's first left-wing president in four decades.

And after giving him a drubbing for the corruption scandal that has shaken the governing Workers' Party (PT) to its foundations, they inevitably denounce Lula's stewardship of the Brazilian economy.

'Bad example'

"Brazil was the world's eighth largest economy - now it's the 14th," reads an on-screen caption in a party political broadcast by the right-wing Liberal Front Party (PFL).

After that debatable statement come figures highlighting Brazil's low growth rate and high tax burden, then the final slogan: "PT government and Lula - a bad example for Brazil."

Similar sentiments are expressed in campaigning by the Social Democrats (PSDB) of ex-President Fernando Henrique Cardoso, who governed, with the PFL as a junior partner, for eight years before Lula came to power.

Brazilian President Luiz Inacio Lula da Silva
Lula has not yet confirmed that he will run again in 2006

Since Lula has been widely praised for ensuring continuity with the economic policies of his predecessors, even to the dismay of some within his own party, these attacks smack of opportunism.

For his part, Lula has hit back at "irresponsible" past governments that sought short-term economic fixes at the expense of long-term stability.

But some economists point to a missed opportunity under Lula.

They argue that high interest rates and slow reforms are condemning Brazil to a growth rate of little more than 3% a year, at a time when some other emerging markets are growing more than twice as quickly.


So has Lula's time in office since January 2003 been an economic disappointment?

It depends on your political perspective.

"For anyone who imagined that the Lula government would be the start of a profound structural change, it's been a disappointment," says Joaquim Eloi Cirne de Toledo, economics professor at the University of Sao Paulo, in an interview with the BBC News website.

Corner of Avenida Paulista and Rua Augusta in Sao Paulo
Many of Brazil's biggest firms are on Avenida Paulista

"But for those who thought the Lula government would be absolutely irresponsible and embark on a populist, socialist adventure, it hasn't been. On the contrary, they are very pleased with the Lula government.

"I think that not being populist and being fiscally responsible is absolutely necessary, but what is being done, unfortunately, is not sufficient. What we have here is the maintenance of the status quo."

Merely keeping things as they are is not good enough for Brazil - and one reason for that is another verdict delivered by a European that still haunts the country's elite.

In 1941, the Austrian author Stefan Zweig, who had emigrated to Brazil, wrote a book praising his new homeland as "the country of the future" - then committed suicide months later in despair at the state of war-torn Europe.

That gave rise to the joke that "Brazil is the country of the future and always will be", a land forever destined never to fulfil its huge potential.


Even today, Brazil's lively and flourishing business press frequently invokes Stefan Zweig's spirit. "When will we be the country of the present?" asks the cover of a recent edition of America Economia magazine.

The Shopping Higienopolis mall in Sao Paulo
Sao Paulo's fashionable shopping centres are symbols of wealth

But in a newly-published book, boldly titled The Future Has Arrived, former Finance Minister Mailson da Nobrega argues that Brazil has come a long way in the past 20 years.

He maintains that the country's evolution since military rule ended in 1985, including the creation of a more open and modern economy, has successfully broken with a highly-centralised tradition dating back to the colonisation of Brazil in 1500.

And if you gaze up at the massive concrete-and-glass towers of the main banks on Sao Paulo's Avenida Paulista or visit the city's opulent shopping malls, it is easy to accept his view.

Brazil has not evolved as it should have
Joaquim Eloi Cirne de Toledo

But then the latest UN Development Programme (UNDP) report on Brazil, also just published, brings you down to earth with a bump.

It shows that the country's huge wealth gap between rich and poor is also to a great extent a gulf between black and white, perpetuating an age-old pattern of economic inequality that the belated abolition of slavery in 1888 clearly did little to change.


According to the UNDP, Brazil was ranked 73rd out of 177 countries in the organisation's 2002 international survey.

If Brazil's white population were considered as a separate country, it would have been in 44th place, putting it in the same bracket as Lithuania or Croatia.

Shoppers in Sao Paulo's pedestrian city centre
Black Brazilians are more likely to be poor than white Brazilians

But its black population would have been in 102nd place, in the company of countries such as Vietnam and El Salvador.

An earlier UNDP report established that the richest 10% of Brazilians are 85 times more wealthy than the poorest 10%, giving Brazil the world's fourth-highest level of inequality.

For those at the bottom of the heap, the shining future is clearly still a long way off.

"Brazil has not evolved as it should have," says Mr de Toledo. "We're not growing rapidly, nor are we redistributing wealth.

"Economic continuity has a good side, but also a bad side, which is to maintain the country in this situation which is permanent and historic in Brazil."

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